Congress passed a new health care law this year, but the main provisions don't go into effect until 2014. So how can you cut the cost of your health insurance in the meantime?
CLICK HERE for the web extra tips on how to save money on health insurance when your kid goes to college.
Raise Your Deductible
What's the first thing we do when we want to save on car or homeowners' insurance? We raise the deductible and you can do the same with health insurance. The deductible is the amount you have to pay out of pocket for your care before the insurance kicks in.
If you choose a higher deductible, the insurance company rewards you with a lower premium. For example, if a healthy, 41-year-old woman raises her deductible from $500 to $1,500, she will save $1,428 per year. She could set the $1,428 aside and use it to cover the $1,000 difference, and still have money left over.
You should only raise your deductible to a level that won't ruin you if you have to pay it.
To get a feel for how raising your deductible will lower your premium, try shopping online. Click HERE to get a quote. Just keep in mind that you have to submit a formal application and be approved before the rates are finalized.
The federal government also now offers a helpful health insurance shopping portal and it is expected to become even more helpful as they develop it further.
Click HERE to learn more.
Open a Health Savings Account
Not many people seem to know about health savings accounts, which you can get when you open a high deductible health plan. They are more lucrative and less hassle than flexible spending accounts. A health savings account, or HSA, is a tax-free account you can use to pay for health care costs. But unlike a flexible spending account, you don't have to guess how much money you will spend on health care and then forfeit the money if you guessed wrong. Instead, HSAs roll over from year to year, you can take them with you when you change employers and you can cash in your HSA for any use after age 65, so if you are fortunate health-wise, you can spend the money on something else someday.
To learn more about Health Savings Accounts and high deductible health plans and how they work, the Treasury Department has a detailed site. Treasury? Yup, since Treasury is in charge of the IRS and since these are tax-free accounts. Click HERE to learn more.
Join a Professional Association
There are other group plans you can join other than through your workplace. For example, you can join your state's farm bureau to get a group rate on health insurance -- and you don't have to be a farmer! If you belong to any professional associations -- or could join -- that's often another way to get group health insurance. And people love to hate credit card companies, but some of them offer access to health insurance coverage as one of their benefits, so you may learn to love your credit card company.
Price Individual Health Insurance
For folks with health conditions, joining a group plan can be key, but if you are young and healthy, it is often cheaper to buy individual health insurance instead of getting it through your employer. The reason is, work plans have to accept everyone and so insurance companies price it to cover that risk. A friend of mine discovered she could get a private policy for herself for $115 a month, whereas adding herself to her husband's work plan was $350 a month. So she saved herself $235 a month, $2,000 a year, by being savvy!
Shop With an Independent Agent
Independent agents have access to multiple different health insurance companies, so it's like shopping around, but with one easy phone call. And the price differences between big reputable companies, for the same coverage, can be dramatic.
"Good Morning America" asked an independent agent to shop around for a big Virginia family with two adults and seven kids, and she found they could save $6,756 a year by switching to a different insurance company. You should keep in mind, sometimes the very biggest insurers don't work with brokers, so you should also price those plans accordingly.
You can find an independent agent at TrustedChoice.org, the consumer website of the Independent Insurance Agents and Brokers of America.
Another source of agents is the National Association of Health Underwriters.
Here are two ways that where your kid goes to college can save you money on health insurance.
If you have a college-aged child who is covered by a commercial health plan -- not just the campus health service -- offered by the university, your child might be able to add you as an additional insured. That's right, some colleges subscribe to name-brand health plans for their students. And the rates are bound to be competitive, because they are insuring a generally young, healthy population. Consult the policy paperwork to see if you can be added.
On the flip side, you may be paying twice for healthcare coverage if you have college-aged kids. Buried in the reams of enrollment and tuition paperwork could be a clause about the student health service on campus or a commercial health plan as mentioned above. It can cost thousands of dollars. If your son or daughter can access your own insurance company's doctors and hospitals in the area where the college is located, you could forego this double coverage. And remember, the new healthcare law allows kids as old as 26 to remain on your plan, and that provision just went into effect.