How to Save Money on Your Health Insurance

Whether you’re purchasing health insurance coverage for the first time or renewing an existing policy here are some basic ways to help you save money on your monthly premiums. Keep in mind that these considerations are only suggestions; only you can truly assess the right combination of coverage and affordability you’ll need to feel secure.

Selecting an EPO or HMO Over a PPO

One of the biggest and most significant areas of cost-savings is the selection of an in-network-only plan (EPO-Exclusive Provider Organization/HMO-Health Maintenance Organization) over an out-of-network plan (PPO-Preferred Provider Organization). While a PPO plan allows you the freedom to obtain care and services from non-network providers- most often without a referral- they are also priced more expensively than an EPO model. PPO plans can also leave you holding the bag on the difference between the plan-allowable amounts covered out-of-network and the total amounts billed by the provider; increasing your annual out-of-pocket costs in addition to those higher monthly premiums. However, PPO plans provide coverage that alleviates worry over “am I covered?” and can provide benefits for doctors and facilities that don’t participate in any insurance plans. In those instances “something” is better than “nothing.”

EPO plans limit you to in-network services only and traditionally cost much less than their PPO counterparts. While an EPO plan’s usually allow referral-free, open access to providers and specialist, they do require that little extra diligence to ensure that you not only seek in-network care initially, but that referring physicians keep you within the network with any specialist, facility, or diagnostic recommendations they make. To make sure that your regular physician or hospital participates in the plan, you’ll want check the EPO’s network prior to purchasing the plan.

HMO plan models function much like EPO plans in that they limit care to in-network providers only. The major differences between HMOs and EPOs lie in the management of care in the HMO model. Patients are asked to select a Primary Care Physician, (PCP) that will be responsible for overseeing or managing the care you receive. If you want to see a specialist or have diagnostic testing done, you must first visit your PCP to allow then to suggest the best course of care. While it may sound restrictive and cumbersome, HMOs are the least expensive of the three models discussed here. HMO’s often operate entire facilities that can administer care for just about all you health needs—even including an on-site pharmacy.

Selecting Higher Deductible, Coinsurance, and Co-Pay Levels

If you find that you seek medical care infrequently or can afford to pay out extra money in the possible event it’s needed, you may want to consider selecting a higher plan deductible, coinsurance (coinsurance is essentially the partial percentage responsibility you bear for of out-of-network/in-network-cost-share costs) or copay level. In doing so, you are sharing more of the risk and cost to insure you; thus your monthly premiums will be lower. There was a time when deductible and coinsurance amounts applied primarily to out-of-network charges under PPO plan models. Now there are plenty of In-Network Cost-Sharing plan designs where deductibles and coinsurance amounts can apply to in-network services as well (most often hospital and in-office/facility surgical procedures). Ideally, you may go 6 months, a year, or even more without requiring any major or catastrophic care. In that instance, selecting higher deductible, coinsurance and copay levels would save you a bundle. That savings could provide you with the ability to save money for a time where you do need more care and would incur additional out-of-pocket expenses.

Prescription Drug Coverage Options: Higher Copays; Mail-Order Use; Annual Maximum Limits; Discount-Only Options

Prescription drugs… a huge topic of discussion as our society becomes more and more accustomed to (and dependent upon) the benefits afforded by nearly-miraculous medications for just about every condition you can imagine. There are ways to save money on your health coverage when considering an Rx coverage option.

Select higher generic/brand/non-formulary copays. This example is self explanatory. If you do not require a maintenance prescription and find yourself healthy most of the year then elect the higher copay options. Perhaps even select a generic-only or formulary-only Rx option (the formulary is a listing of plan-covered prescriptions like the participating provider list is a listing of plan-covered doctors) that excludes brand name and non-formulary prescriptions that would normally bear higher costs even under your plan.

Choose an Rx option that contains an Annual Retail Maximum. Annual retail maximums apply to retail-administered prescriptions only. Mail order or maintenance prescriptions are not subject to the annual retail maximums. Annual maximums are most commonly applied “per person” and may well suit your family and their annual needs for antibiotics etc. The lower your Annual Retail Maximum amount the lower the cost of your plan’s prescription component.

Use of the Mail Order option for maintenance drugs under any prescription plan is a must. This is a basic, easily-accessed cost-saving feature. Ask your physician to prescribe a 3-month supply of your drug and use the applicable forms to obtain your three-month supply at (most often) a two-month copay level. It is almost always up to you, the subscriber, to re-order your next supply well before you run out of your current supply.

Insurance carriers fully understand the cost of providing prescription benefits. It’s not that hard to imagine that a percentage of those costs are passed onto you in the form of premiums, deductibles, and copays. Carriers are now responding to consumer requests to purchase plans without prescription options and instead choosing to absorb the cost themselves should the need for prescriptions arise. There are many plans available without prescriptions or those that include a prescription discount plan at no additional premium costs. You may wish to elect one of these options if you and/or your family have infrequent need for prescriptions.

Purchasing a High Deductible/Health Savings Account-Compatible Plan

High Deductible Health Plans with compatible Health Savings Accounts (HDHP/HSA) are all the rage in the cost cutting arena, particularly among employers with few to many employees. The high deductible feature cuts premiums in half in many cases because you, the insured, is sharing a decent portion of the risk, and the health savings account feature provides for the deposit of pre-tax funds (up to annual limits determined by the government) in to an account used for paying medical expenses (any remaining funds can be reinvested, but will most likely be taxed at that point. The funds are not taxed when used for medical expenses). HDHP/HSA plans do lower monthly premiums, however, with the exception of a few basic “first dollar” preventative and wellness-type services that vary from carrier to carrier, all expenses are out-of-pocket until you reach your deductible amount. Under most plans you will be 100% “in benefit” once your deductible is reached (100% does not mean all billed expenses will be paid in full. It means that you will receive 100% of the carrier’s Allowed Charges schedule). Most HDHP/HSA plans will allow you to seek care both in and out of the plan’s provider network. Some plans will even feature a “shared deductible” between in and out-of-network service charges that calculates and adds both in and out-of-network out-of-pocket expenses together; helping you reach your deductible amount much more quickly than if you had separate in and out-of-network deductible levels. HDHP/HSA plans can afford excellent savings, but policy holders must be prepared to fund their deductible initially. You’ll want to consult your insurance agent to thoroughly understand how these plans work, and if one will be right for.

Network, Network, Network

Much like the first example about EPO or HMO plans above, it is a simple concept to remember and implement: STAY WITHIN THE PLAN’S NETWORK. It is understandable that we get comfortable or trust our regular physicians who may not be in the plan’s network, or any for that matter- but, it is so important, when talking about saving money, to seek care within a plan’s network whenever possible. This includes not only doctors, but labs and any diagnostic facility, hospitals, and physicians that treat you within a participating hospital. Even though you may be in an “in-network” hospital, you may be treated by physicians that do not work for the hospital and do not participate with your insurance plan. You will be responsible for a portion of (or the entire) balance of any applicable charges depending on your plan type (EPO/HMO/PPO/POS). Whenever possible, request that you been treated by in-network physicians only when admitted to the hospital.

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