Your rate for health care insurance will, to a very large degree, be controlled by the amount of risk you are willing to take. This means that you will pay more for a no deductible medical care insurance plan than you will pay for a moderate or high deductible medical care insurance plan.
Your premiums will be determined by other insurance-related issues as well. These insurance-related elements include your location, your age, your sex and your state of health. However, the insurance-related factors you have the most control over may be the deductible you select when purchasing a health insurance policy.
Most consumers know that when you purchase a high deductible medical care insurance contract, you will pay less than if you take a small deductible health insurance plan. However, what most don't know is that the increase in your cost share is not the same as the decrease in premiums.
For this reason a bigger deductible health care insurance contract is often a much better bargain when compared to a 0 deductible contract. Raising your risk by a dollar often results in a drop in costs of greater than a dollar.
Chances are you can buy a health care insurance policy very similar to the one you now pay for with a higher deductible. If that is the case, it will be easy to compare your options.
To check to see if you can drop your rate without raising your risk too much, you can use this 3 step process. The first step is to calculate the amount you will save each year with the higher deductible policy by subtracting the annual cost of your current health care insurance policy from the annual cost of the higher deductible plan. Then figure out how much additional risk will take on if you get the bigger deductible contract. Finally deduct the potential savings from amount of the potential additional risk. Call this number your "net additional risk".
If you want to take on the net additional risk the dollar figure, consider purchasing the cheaper policy. But before you do so, do the same exercise again. This time compare your current contract with a policy with an even bigger deductible health care insurance policy.
Health insurance plans that are compatible with HSAs or Health Savings Accounts are often the most cost effective policies. These plans typically have larger deductibles and low prices. They often will pay for some preventative medical expenses even if you haven't met your deductible.
This cost-saving technique should not only be used to reduce your medical care insurance prices. You should also apply the same process to halve your costs for auto insurance and for your other personal insurance contracts.
Raising your deductible and cutting your insurance premiums is a proven technique for getting your costs lower. However, there are two things that you should take into consideration.
The first is that it is intelligent to hold on to the money that you save by cutting your prices. Holding on to this money can help you in two ways. If you have expenses that are not covered by your insurance policy, some of this money can be used to cover those expenses. If you do not have uninsured expenses, you can more money for retirement.
The second is that a deductible is not the only cost share for medical insurance. Often two policies with the same deductible might be quite different. The others are coinsurance and copayments.
When comparing medical care insurance plans, it pays to look at all the insurance-related factors involved. Do not focus on the deductibles and forget about the other insurance-related things.
As prices for insurance rise, we have to get smarter and make better choices. The steps above might help you lower your costs for insurance and increase your financial security.
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