There are several ways to reduce a Health Insurance premium. All of them rely on reducing some coverage. However, several of the options may actually improve your situation. If a person gives up a benefit that they would hardly ever use, the results could be very beneficial.
The four most common methods of reducing benefits are:
1. Increase the deductible
2. Increase or eliminate co-payments
3. Add a deductible to Prescription coverage
4. Change the co-insurance percentage

The most common option for lowering premiums is to raise the deductible. In a normal PPO plan, the three most common occurrences are physician visits, prescriptions and urgent care visits. In most plans these are all covered by a co-pay and do not even involve a deductible. Deductibles usually apply to hospital visits, surgeries, x-rays and imaging exams. That means many people often go through a plan year and never use their deductible. Ask your Insurance Company the cost of raising the deductible. The decision may be very easy. If my client raises their deductible by $1,000 and it saves them $80 per month, the decision is simple. They are saving $960 to take on a $1,000 extra risk. If they do not have a deductible in the next year, they have saved $960. If they use their new deductible, it hasn’t cost them an extra $1,000. They only lost $40 because of the premium savings.

People can explore raising or eliminating co-payments for Doctor Visits. Again the savings will depend on how many time in a year you or your family have a Doctor’s appointment. If you only have a few visits a year, the potential savings could be very beneficial. If, however, you have a large family or a chronic condition which necessitates more visits than this idea may not be economical.

When I suggest adding a deductible to Prescription Care many people initially object. We just are not used to such a policy. Please consider what your Prescription Cared is really worth. There are many generic drugs which can be purchase at large Pharmacies for $4. In those case the Prescription Card has no value. I would venture to guess that any generic drug for $25 or less has no value with a Prescription Card as the co-pay will pay for all or most of the drug. Consider the example that a person has to take a drug that normally costs $100. Their Prescription Card allows the purchase for a co-pay of $60. This is worth a $40 value for the number of months the drug is taken. What is the premium savings? This could be a very worthwhile savings idea.

Finally, few people consider changing the co-insurance provision. This is the benefit that kicks in after the deductible is met. This is traditionally 80/20 to a policy maximum. That means the Insurance Company pays 80% and the Insured pays 20%. Here are a couple of ideas. Check out changing that percentage to 30% or 50% but try to keep the policy maximum the same or similar. Another strategy is change your plan to a deductible the same as your current policy maximum and take a 100/0 co-insurance. On that policy you will responsible for the deductible (higher than your current one) and then nothing else. However, your out of pocket maximum has not changed.

By exploring one or all of these strategies, people can proactively keep their Health Insurance premiums reasonable but still have excellent catastrophic protection.

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