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As inflation and other cost-of-living complications hit your wallet, you may find yourself seeking ways to cut down on additional monthly expenses. One way to streamline your spending is to lower your monthly healthcare costs. While it's important not to cut corners on the medical services you actually need, there may be instances where you're overspending.
Join the #TRN team as we look at some common ways to find savings on your healthcare plan!
Finding the Balance on Healthcare Expenses
1. Apply for a Tax Credit Subsidy
If you purchase your healthcare policy through the ACA Marketplace, be sure to check your eligibility for federal tax credits to offset your payments. The Affordable Care Act defines the income levels you're eligible for a premium subsidy. You can only get the premium subsidies by buying a plan through your state's health insurance marketplace, and the subsidies come in the form of tax credits.
Tax credits are adjusted and re-adjusted based on your income, so if you lost a job or experienced a reduction in your monthly income, update this during your open enrollment process; it could increase your monthly healthcare subsidy from the government. Remember that this also goes the other way: if your income increases during a tax year, you may no longer qualify for the full subsidy you were eligible for at the beginning of the year.
2. Pick a Plan with a Higher Deductible
If you maintain a healthy amount in your emergency savings fund and/or don't typically need much more than the annual checkup and basic preventative care, a higher deductible plan may be a way to trim your monthly expenses.
Your deductible is the amount you must pay toward your healthcare services before your health insurance begins to pay. Generally speaking, the higher the deductible on your healthcare plan, the lower the premium you have to pay every month. It's a trade-off, so you'll need to ensure you can afford to meet your deductible threshold in a worst-case scenario, like an injury or severe illness.
Bronze Plans and More
If you've weighed the potential costs and benefits of choosing a high deductible/low monthly premium plan and would like more specifics, look into the options available with bronze-level healthcare plans.
One way in which the ACA Marketplace organizes its plan levels is by naming them after precious metals:
With Gold plans, you'll see higher monthly premiums with lower deductibles and out-of-pocket maximums
Silver plans strike a balance between moderate pricing on monthly premiums and mid-range deductibles or out-of-pocket maximums.
And with Bronze plans, you'll see the lowest monthly costs on essential medical services but the highest deductible and out-of-pocket maximum pricing if you need more than just the basics.
3. Choose an HMO
Another way providers use to structure and classify healthcare policies is to sort them by network structures: HMOs, PPOs, and EPOs. The difference between these structures primarily relates to how much control you have over the medical providers you see.
In short, choosing a Health Maintenance Organization (HMO) is the least expensive route. It may work well for the shopper who doesn't require very specific care or doesn't desire much control over the providers or facilities they use. With an HMO, one primary care physician coordinates your care, and you'll need a referral from them to see a specialist; if you seek care outside of this coordinated network, your plan won't cover it except in an emergency. That's how an HMO lowers health care costs—and your monthly payment.
The appeal of the HMO is the low price point, which may be a good choice if you're a healthy individual who doesn't require the assistance of specialized medical professionals who would be out of your HMO network.
Higher Priced PPOs
With a Planned Provider (PPO), on the other hand, you pay for the freedom to see the doctors you want without a referral—in or out of your plan's network—and still be covered for most services. With a PPO, you'll pay higher monthly premiums, which may be worth it if you need specialized care or want to see specific providers that an HMO might not cover.
Exclusive Provider Organizations, or EPOs, strike a middle ground between HMOs and PPOs on costs and freedom of provider choice.
4. Choose a Plan That Pairs With a Health Savings Account
Health savings accounts, or HSAs, can be used to pay for your medical expenses. You can save on taxes with a health savings account because the money you put in and take out is tax-free or tax-deductible.
Plans that pair with a health savings account will have higher deductibles, but the good news is that their monthly premiums will be lower. Another feature is that the funds in your HSA account roll over from year to year, so there's no need to panic and spend your money out of fear that you'll lose it at the end of the year.
Keep in mind there are some stipulations you need to be aware of to be able to benefit from an HSA. You need to be under the age of 65 to be able to open a health savings account, meaning Medicare or Medicaid can't cover you. You'll also need to choose a high-deductible plan to pair with your HSA.
5. Consult an Expert (for Free)
Still unsure about the best way to lower your healthcare costs? We get it. Health insurance is one of the most complex topics out there today. Even if you understand healthcare networks and how they apply to your situation, there are many other factors to consider before you finalize changes to your plan.
Luckily, you don't have to do this alone.
We're not health insurance agents; we're matchmakers who are passionate about connecting consumers with the experts you can trust. When you work with a licensed health insurance agent committed to understanding and educating their clients, you can receive guidance tailored to your situation and needs.
Best of all, you won't need to pay out of pocket for their services. If you need help finding an agent you can trust, that's our specialty.
Find out how to secure the coverage you need for your healthiest life.
Want to be a part of the #TRN Team? We are looking for guest writers to contribute to our blog. Reach out to jo@trustedreferral.org to learn more.