Affordable Health Care

Finding Affordable Health Care isn’t easy these days. Traditional health insurance plans with low co-pays and deductibles have become too expensive for many Americans. Many people work so they can be covered under an employer’s group insurance policy, but what about those who are self-employed? Fortunately, there are more affordable alternatives. In this report I will discuss some health care strategies.

Are group insurance plans the answer? The main advantages to a group plan are, usually someone else is paying for part of it, and people with pre-existing medical conditions can get coverage. Most people assume that group rates are cheaper than individual rates, and sometimes the are. But often that is just because the employer is paying part of the premium as an employee benefit. The fact is, group rates are based on the collective health of the entire group, so if a few employees have high medical expenses, the other employees are charged more to make up the difference. Many times a healthy person can find better rates than going through an employer.
There are two disadvantages to employer’s group policies. First you have limited choices from whatever plans are offered. And second, when the job goes, your insurance goes. Then if you have a medical condition, you could find it very difficult and expensive to get replacement coverage, even with COBRA benefits. By getting your own policy now, you get to choose the best plan for your needs and you won’t lose it if you change jobs. If your employer does offer group insurance and you want your own plan, ask if they will contribute to your policy instead.

Americans are used to health insurance with low-deductibles and low co-pays. The easiest way to lower the cost of health insurance is to take a higher deductible and co-pay. Premiums drop dramatically as deductibles rise. But many people find it difficult to pay the higher deductibles. A great strategy would be to pay less to the insurance company and put the difference into a savings account. Your monthly out of pocket expense may be the same, but look at it this way. If you pay all your money to an insurance company and never use your insurance, the insurance company just keeps your money. But if you put some of that money into a savings account and don’t use it, you get to keep your money plus interest.

That’s pretty much how a Health Savings Account or HSA works, only better. With a HSA, you have a high deductible major medical plan with premiums about 45%-55% lower than a traditional health insurance policy. You can then put the money you’ve saved into a qualified Health Savings Account. Contributions to your Health Savings Account are tax-deductible. Than means that if you are in a 33% tax bracket, Uncle Sam will contribute one dollar for every two dollars you contribute. Pretty good deal huh? But wait, it gets even better.
The money in your Health Savings Account earns interest, beginning with the first dollar deposited, and your account will grow tax-deferred. Then you can withdraw money tax-free to help pay your deductible or other qualified health care expenses like prescriptions, vision or dental care.
Now, either you will need your health coverage or you won’t. If you do have medical expenses larger then your deductible, your insurance will take over paying your bills. The company I represent pays 100% of all covered expenses up to $3 million dollars. And if you don’t have many medical expenses, the money in your Health Savings Account will still be your money. Any money you don’t use will accumulate year after year.
A Health Savings Account can give you back control over your health care instead of an insurance company making all the decisions. You will still get the better rates for services negotiated by the insurance company with the doctors, hospitals and drug companies. But many Doctors will work with patients when they know you have a Health Savings Account. Your Doctor may give you a greater discount knowing that he will be paid now rather than waiting for an insurance company to pay. He may also offer you the choice of a less expensive treatment or prescription since your the one making the decisions.

For more information, or an on line quote, Kentucky residents may visit my web site Financial Team.

Note: The author is a licensed insurance professional in the Commonwealth of Kentucky. Insurance rules are State specific, therefore the opinions and advice offered here pertains specifically to residents of Kentucky. Although persons in other areas may find this information useful, no warranty is made and anyone should consult with a licensed agent in their home State before implementation of any of the ideas offered here.