Your price for health insurance will, to a very large degree, be influenced by the choice of the deductible you are willing to take. This means that you will pay more for a small deductible health insurance policy than you will pay for a moderate or high deductible medical care insurance contract.
Your price for health insurance will,
to a very large degree, be influenced by the choice of the deductible you are willing to take. This means that you will pay more for a small deductible health insurance policy than you will pay for a moderate or high deductible medical care insurance contract.
Your rate will be controlled by other insurance-related factors as well. These insurance-related elements include your location, your age, your gender and your health history. However, the insurance-related things you have the most control over may be the deductible you select when purchasing a medical care insurance policy.
Most consumers know that when you take a high deductible health insurance plan, you will pay less than if you buy a small deductible health insurance plan. However, what most don't know is that the increase in your risk is not the same as the decrease in premium.
For this reason a bigger deductible medical care insurance policy is often a much better bargain when compared to a no deductible contract. Raising your risk by a dollar often results in a cost-savings of greater than a dollar.
Chances are you can buy a medical insurance contract very similar to the one you currently own with a bigger deductible. If that is true, it will be easy to compare your options.
To determine if you can cut your rate without raising your risk too much, you can use the following process. Step one is to calculate the amount you will save each year with the higher deductible policy by subtracting the annual cost of your current health care insurance contract from the annual cost of the higher deductible policy. Then determine how much additional risk will take on if you buy the higher deductible plan. Finally deduct the potential cost-savings from amount of the potential additional risk. Call this dollar amount your "net additional risk".
If you like the net additional risk the dollar amount, consider purchasing the cheaper contract. But before you do so, do the same exercise again. This time compare your current plan with a contract with an even larger deductible medical insurance contract.
Medical care insurance plans that are compatible with HSAs or Health Savings Accounts are often excellent options. These plans typically have bigger deductibles and lower costs. They often will pay for some preventative health care even if you haven't met your deductible.
This money-saving technique should not only be used to halve your medical insurance costs. You should also apply the same process to cut down on your rates for auto insurance and for your other personal insurance policies.
Raising your deductible and cutting your insurance prices is a tested technique for getting your premiums down. However, there are two things that you should take into consideration.
The first is that it is intelligent to save or invest the premiums that you save by cutting your rates. Holding on to this money can help you in two ways. If you have expenses that are not covered by your insurance plan, some of this money can be used to cover those expenses. If you do not have uninsured expenses, you may have a better retirement.
The second is that a deductible is not the only cost share for health insurance. Often two plans with the same deductible may be quite different. The other major cost shares are co-insurance and copays.
When comparing medical care insurance contracts, it pays to look at all the insurance-related factors involved. Do not focus on the deductibles and forget about the other insurance-related things.
As the cost for insurance rise, we have to get smarter and make better choices. The steps above can help you lower your costs for insurance and enhance your financial security.
