How Can I Lower My Monthly Healthcare Costs?
Updated: Mar 7
Health Insurance can be a confusing & stress-inducing topic of discussion, especially during open enrollment. Our goal is to provide you relevant & topical health insurance information and access to providers that are specific to your given industry & situation — providing you the best coverage & price every time.
There are many different ways you can lower healthcare costs, below are a few ways to help you get started:
Are you eligible for the tax credit subsidy?
Don’t miss out on subsidies
The Affordable Care Act defines the income levels at which 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. Here’s a chart to determine if you’re eligible.
If you buy your own health insurance, you may get help paying for it from the government. The Advanced Premium Tax Credit subsidy lowers your monthly payment. When you’re shopping for plans, you’ll be able to see if you qualify for lower costs. Generally, if your estimated annual income falls between 100%-400% of the federal poverty level, you would qualify for the premium tax credit depending on the state you live in, as well as your age. There are other situations in which you could be eligible for the Advanced Premium Tax Credit. For example, if your employer doesn’t offer you healthcare insurance that costs less than 9.5% of your annual income and pay at least 60% of the coverage benefits you are eligible; If you don’t qualify for Medicare or Medicaid, you are eligible; if you are married and file a joint return, you are eligible; if there is no one claiming you as a dependent, you are eligible.
At the end of the day, there are lots of people that would qualify for the tax credit subsidy but don’t claim it because they don’t know they qualify for it. After all, this is a fairly new possible benefit for the American people, due to the recent Affordable Care Act.
Choose an HMO
When you choose a PPO (Preferred Provider Organization), you can see the doctors you want without a referral, in and out of the network for most services, and still be covered. You pay for this freedom with higher premiums. The appeal of the PPO option is that you can see whatever doctor you want, whenever you want, but you’re going to be paying for it.
With an HMO (Health Maintenance Organization), one primary care physician coordinates your care. You need a referral from them to see a specialist, and there’s no out-of-network coverage 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 is a good thing if you are already a healthy individual that doesn’t require the assistance of specialized medical professionals that would be out of your HMO network.
Choose a plan with a high deductible
A deductible is an amount you pay for health care services before your health insurance begins to pay. A plan with a high deductible, like our bronze plans, will have a lower monthly premium.
If you don’t go to the doctor often or take regular prescriptions, you won’t pay much toward your deductible. But that could change at any time. That’s the risk you take. If you’re injured or get seriously ill, can you afford your plan’s deductible? Will you end up paying more than you save?
Think critically about your current health situation, weigh out your personal pros and cons and come to a conclusion that best fits your personal situation.
Choose a plan that pairs with a health savings account
Health savings accounts, or HSAs, are accounts that you use to pay for medical expenses. You save on taxes with a health savings account because the money you put in and take out is either tax-free or tax-deductible. You can also save on your monthly payment. Plans that pair with a health savings account have higher deductibles, so their premiums are lower. The money you put into your HSA is yours. The funds in your HSA account roll over from year to year, so there is no reason to panic and spend your money in fear that you will lose it.
Anyone is allowed to add funds to your HSA account up to an annual limit that is set by the IRS (Internal Revenue Service) each year.
However, 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 you can’t be covered by Medicare or Medicaid. You also will need a high deductible plan to be able to have an HSA. A high deductible plan is at least $1,350 deductible for one person and $2,700 for two people. So just keep that in mind while you are considering your options.
Stop Smoking/Form Healthier Habits
Health care reform altered the insurance landscape by not allowing insurers to use gender or health conditions for pricing. But they can still charge more to smokers — up to 50 percent more for the same plan. Health is wealth and smoking puts a hurt on your body and your wallet. According to a recent study by UMASS, the average pack-a-day smoker spends on average $1887.05 annually. That’s a big chunk of change that could cost you 10x that amount due to medical costs to treat illnesses that come about as a result of being a smoker.
Overall, there are many ways to save money on your current healthcare costs. However, not all of these choices make sense for everyone. There is no one size fits all solution to a personalized health care plan. That is why it is important to know your needs and educate yourself about the possible options that are available.