HEALTHCARE PLANS ARE EXPENSIVE – HOW DO I SAVE MONEY?… SAFETY NET???
TOP TIP: THINK OF INSURANCE AS A SAFETY NET FOR WHEN SOMETHING BIG & BAD HAPPENS, AND PICK YOUR PLAN ACCORDING TO YOUR DAY-TO-DAY NEEDS!
One of the reasons why health insurance is so expensive is that people have been conditioned into believing that it needs to cover everything. And although it would be nice if it did, that is not how the system has truly been set up. Other than the premium, you are paying co-pays, meeting the deductible as well as other out-of-pocket costs. Making decisions on your plan, as well as how to negotiate day-to-day out-of-pocket costs is vital if you aim to save money on your overall healthcare coverage.
The first thing to consider is that you should view your insurance as a “safety net” for when something big and/or bad happens. When surgery or hospitalization is needed, that is the primary need for your insurance. If you view it this way and do not expect it to cover all the day-to-day other needs, it may become a reality for you that paying cash for those day-to-day things can in fact be cheaper.
Here is an example, of a recent client experience:
My client needed an MRI. The MRI cost was quoted as $2400, which they wanted to be paid upfront because it was not an emergency. She has a deductible of $3000, meaning it would all have been out-of-pocket. Green Imaging (a local business) has MRI quotes for around $500. In this case, it would make sense for my client to not use her insurance, and pay cash for this, saving almost $2000. She is a low user of healthcare coverage and so this made sense for her.
The next factor to consider when trying to save money is an area of picking a plan. The key questions to explore are:
- How do you use your insurance? Are you a high or low user?
- Who are your doctors?
- What medications do you take?
- How often do you go to the doctor?
- Do you know of any surgeries or procedures that will be needed this year?
I have clients that tell me they’re only going to a doctor once a year. This makes them low users. They may want to consider a high deductible plan because the wellness aspects (such as pap, mammogram, physical, colonoscopy) are generally going to be covered 100% on a major medical high deductible plan. So why not have a high deductible if you’re not a high user of insurance? It means that you’ll save on the premium because as we know, the general rule is: the higher deductible the lower the premium.
Many insurance agents will try and just give you the plan with the cheapest premium, but that often can actually work out more expensive for you in terms of out-of-pocket costs. How? I’ll give you an example.
A gentleman with back issues knew he was going to need regular treatments and injections. He would be a high user of health care. He actually qualified for $0 health care plans, but I did not give him the $0 health care plan. This is because the $0 health care plan had an $8,000 deductible, meaning he would have had to pay out-of-pocket for his weekly treatments until he reached $8000.
Instead, I gave him a plan that cost $60 a month. His co-pay was $5 for his doctors. He has saved a lot of money by choosing to pay $60 a month for his health care premium, and a low co-pay per doctor’s visit.
Don’t only pick a plan based on the deductible, pick it based on your level of usage and overall costs figured out in total, and this should help you to save money!
If you have questions or concerns about your healthcare please feel free to reach out to me.