In 11 Ways to Cut Your Car Insurance – we examined ways to cut your car insurance premiums. Today we’ll flip it around and take a look at what we can do to lower our health insurance costs. This one is even bigger — in many households, health insurance costs are second only to housing as the top expense. And many times the difference between housing and health insurance isn’t all that much.
Raise your deductible and co-pays
Raising your deductible and cutting co-payments is the most common and probably the most effective way to cut your health insurance. In fact you can reduce your monthly premium by hundreds of dollars with just this one step.
As an example that I’m pulling from one of my own recent posts on this site:
“…coverage for a family of four living in Georgia (male, 40, female, 39, two children, non-smokers) with a deductible of $2,000 and $35 co-pays for doctor visits will be $863 per month (via Assurant). If the deductible is increased to $10,000 and the $35 doctor visit co-pay is eliminated, the monthly premium falls to $295.”
Increasing the deductible from $2,000 to $10,000 is admittedly extreme, but it illustrates the point clearly—the premium falls by nearly 70%. You can achieve significant savings even with smaller increases in your deductible. This is something you might consider doing if you are in good health and not a frequent user of healthcare. If you have health issues and regularly use healthcare, you’d be better off staying with the low deductible.
If you do raise you’re deductible, you can offset the risk with one or more of the following:
- Add an amount equal to your deductible to your emergency fund
- Enroll in a health savings account (HSA) if it’s available through your employer
- Use mini-clinics, usually available at major chain pharmacies, for primary care – my family has used them several times and they charge a fraction of what a family doctor does
- Use generic prescriptions where ever possible, or take advantage of special programs, such as $4 for common generic prescriptions at large retail chains.
Drop unnecessary policy provisions
Most health insurance plans include various add-on provisions that you may not need. A prescription drug rider is just such a provision. If you aren’t on any ongoing drug therapies you don’t really need this coverage. It adds hundreds of dollars per year to the cost of your health insurance policy for a benefit you rarely need. If all you need in a typical year is an occasional anti-biotic (which are usually quite inexpensive to begin with) then a prescription rider is mostly just a comfort provision.
Dental and vision coverage are two others. Most dental plans have a high cost-to-benefit ratio, and if you’re only going for a cleaning and ex-ray once a year it might be less expensive to pay the dentist direct than to maintain coverage. Vision plans work much the same, but you have an out here. Many chains, such as VisionWorks, offer online coupon offers that come very close to the benefit a vision policy will pay. I’ve done this myself and after that we canceled our vision coverage.
Eat less, move more
This has become a cliché with all things health related, so I won’t beat it to death, but it’s very true. Most illnesses (and even injuries) can be prevented by better living. You don’t have to work to be an Olympic athlete to get a benefit here, just cutting back on the worst foods and getting regular, moderate exercise can produce measurable improvements in heath, and ultimately lower health insurance costs.
Shop around from time to time
We get used to being in the same health plan and using the same providers, but change can provide noticeable reductions in health insurance costs. At any given time, one or more insurance companies might be looking either to increase their business, or cut it back, and you want to be on the alert for those who are looking to expand. They’ll usually reduce premiums (or not raise them with the herd) in order to grow their business. The savings can be substantial, if only for a couple of years.
While this can seem like being on a health insurance merry-go-round, it’s exactly what employers are doing by changing insurance carriers just about every year. It’s a bit aggravating when an employer does this, but it does serve to keep costs down. We may need to follow that example with private plans.
Get out of stressful situations
I’ve saved the best for last, probably because it’s the most radical. And perhaps the least considered.
Stress has an affect on healthcare costs, and how we manage it can have a major impact on our budgets—as well as so many other areas of our lives. In the near term, stress can cause a series of minor ailments, such as persistent fatigue, headaches, body aches, and – for lack of a better description – the absence of a sense of well-being. Increasing doctor visits, prescription medications and the running of medical tests are often the result. But it can get worse.
In the long run, if the stress is tolerated for too long, it can result in the kind of chronic illnesses that can cause the cost of healthcare and health insurance to explode.
While we might want to assign catastrophic health events to genetic or even environmental factors, evidence is increasing that stress plays a major role. A Canadian research study concluded that high stress work situations are not only associated with increased risk of illness and long term health problems, such as cardiovascular disease and depression, but—not surprisingly—also higher healthcare costs. Are you surprised? Probably not, but often seeing the results in black and white helps to make it real.
It’s not just work that causes stress either. Financial problems in general are a major source of stress for many people. Debt is one such example, maintaining a high cost lifestyle is another. Both require a high-paying and often high stress career to sustain, and that can be a double whammy.
Part of the problem with identifying stress is that we often accept it as a given, as if its part of the price we have to pay to have the lifestyles we want. I’m not so sure. It can also be an example of the frog in the pot of boiling water—the frog acclimates itself to the slowly rising water temperature until it’s too late to jump out and then…well you know how that story ends.
So what am I proposing here? Only that your life, health and happiness are worth more than a high stress job, a crippling house payment, a high cost lifestyle or a mountain of debt. Life throws enough stress at us that’s completely beyond our control that we need to control any stress generators that we can.
What does that mean? Leave the high stress career and do work that fits your personality, preferences and stress tolerances better than the one you have. Sell the house with the outsized mortgage and move to a more modest one. Adopt a lifestyle that provides more meaning but costs less money. Do what ever it takes to get out of debt. Pick the single biggest stress generator in your life and be purposeful about eliminating it. Then go for the next one!
The stress you eliminate will lead to better health AND lower health insurance costs.
(Please see the updated 20 Part-time Jobs With Health Insurance post for the most current list of employers who offer health coverage for their part-time staff.)
What do you think about the connection between stress and health/healthcare costs?