Rising healthcare costs can put a huge dent in your budget. But it can be even more costly to go without healthcare — especially if you wind up with enormous medical bills.
During the final months of the year, most employers offer open-enrollment season, giving workers the opportunity to opt into a new health insurance plan or change existing healthcare coverage.
This is an important benefit, so don’t overlook your on-the-job coverage. But what about people who are self-employed, changing jobs or currently unemployed?
Fortunately, there are strategies these individuals can use in order to lower healthcare expenses. Here’s how to get cheaper health insurance.
Balance coverage and access with affordability.
Generally, you want to look at price, coverage, and ease of use when picking up any healthcare policy. Clearly, affordability should weigh heavily in your decision, but don’t let that be the sole criteria. Besides, costs are much more than premiums.
Don’t forget to look at the three other times you’ll have to dole out money, including prescription drug costs in the plan (make sure the drugs you take are actually covered), the deductible you have to pay before benefits kick in, and the overall amount you can be expected to shell out in any given year.
Consider a high deduction plan.
If you’re single and in relatively good health, you can save money by picking a low-cost, high-deductible plan that will cover you mainly for major procedures. However, if you go to the doctor a lot of have kids, don’t make the mistake of picking a cheap policy only to later discover that it only covers major injuries or catastrophic illnesses.
In the new Insurance Marketplace, established as part of the Affordable Care Act, the Platinum Plan offers the highest premium with the highest coverage. The Bronze plan offers the lowest premium but also the least amount of coverage, with the individual paying for about 40% of medical of medical expenses.
Before you choose any plan or switch to a new one, if you have a preferred doctor, make sure he or she accepts the plan you’re considering.
Consider your expected usage.
On the coverage front, find out what services and procedures are included–as well as which treatments are excluded. Then, figure out how you would fare in a typical year, based on your expected use of benefits, the premiums, co-pays and prescription drugs you may need.
For instance, if you take specific medications, you might choose a plan with higher premiums if the drug costs were low enough to offset it.
Speak with your employer about discounts.
A growing number of employers will pay some of your healthcare premiums or at least offer more generous discounts, if you agree to practice certain healthy behaviors. For example, you might lose weight, stop smoking, get regular checkups, or walk 30 minutes a day –all of which could lower your healthcare expenses. Be sure to check with your HR department to see if your company offers such perks.
Tips for entrepreneurs and freelancers. If you’ve been laid off and am now working as a freelance consultant or if you’ve recently started up as a full-time independent contractor, you’ll need to get good, affordable health insurance on your own.
For those anticipating a job transition, you’ll want to find health insurance that won’t cost an arm and a leg once COBRA runs out.
The best way independent consultants and freelancers can find affordable health insurance is to take advantage of the group policy discounts offered through membership groups through which they may be affiliated.
For instance, by joining the Freelancer’s Union free of charge, you can get reasonable rates on health insurance and dental coverage. You can also try the non-profit National Association of Socially Responsible Organizations for referrals to health plans, state by state, that offer affordable health insurance rates for freelancers, small business owners, and independent contractors.
NASCRO is a health care exchange for employer groups, individuals and people on Medicare. NASCRO also functions as both a service provider and an advocate for professionals, employees, small businesses and non-profits.
One financial benefit of being a freelancer/entrepreneur is that you’re allowed to deduct at least part of the cost of the health insurance premiums you pay. This allows you to recoup some of your healthcare expenses.
For more information about the tax advantages available to self-employed persons paying for health insurance, see IRS Publication 535, Business Expenses. The health insurance information is under Section 6.
Advice for the unemployed.
FInally, if you’re unemployed you may be able to get an affordable health insurance plan through the Marketplace. More details are available at Healthcare.gov. https://Healthcare.gov. But generally speaking, your savings will be based on your income and household size since those factors–not your employment status–determine what health coverage you’r eligible for and how much help the government will offer in paying for coverage.
Depending on your income (or lack thereof), you might also be eligible for free or low-cost coverage through Medicaid or the Children’s Health Insurance Program (CHIP). CHIP is offered in every state and it provides health insurance to children whose families earn too much to qualify for traditional Medicaid but have low incomes.
Lynnette Khalfani-Cox is a personal finance expert and co-founder of the free financial advice site, Askthemoneycoach.com. Follow Lynnette on Twitter @themoneycoach and on Google Plus.
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