According to a recent eHealth study, the average monthly cost of health insurance is $456/month for individuals and $1,152/month for families. Not only is health insurance expensive, it’s also overwhelming. Which plan is right for you? How much will it cost? What add-ons (if any) do you need?
Enter Spot! We’re here to break down what to look for and how to save money on health insurance so you can spend that extra cash on something way more fun.
How Can I Save Money on Health Insurance?
- Applying for healthcare in an open market? Click here to see if you qualify for a premium tax credit (PTC) (if you're eligible, the PTC can cover the premiums for your health insurance, if purchased through the Health Insurance Marketplace).
- Consider higher deductible plans, especially if you consider yourself relatively healthy, and layer it on with a product like Spot. In most states, the annual cost of Spot is $312 per year, compared to the extra $100 to $300 you'll pay per month for a lower deductible plan. Spot can easily save you hundreds or even thousands of dollars per year!
- Consider contributing to a health savings account. This allows you to use pre-tax income to pay for anything health related. This is a great option if you know you’re going to the doctor or will be needing prescriptions during the year.
- Know your co-pay!
Be Weary of High-deductible Health Plans (HDHPs)
- HDHPs are not all bad, especially if you’re healthy—just know what you’re getting into. Keep in mind that you’re responsible for all costs until your deductible is met; which, as you can imagine, can be expensive. Know what your HDHP covers, since it may only cover certain types of accidents.
What to Consider When Signing Up for Health Insurance
- If your employer offers healthcare, review the plans and determine what you really need. The language can be complex and plans can look the same, so be sure to understand what your deductibles cover, including medications. If they offer someone to talk to, consider taking them up on the conversation.
- Consider whether you want an HSA; it can be a good option if you enroll in a HDHP. HSAs are tax deductible, but can have penalties for withdrawing cash to pay for something not HSA related.
- Find out if there’s a maximum pay out, (the highest amount your insurer will pay for a claim) or if you’re covered for everything after your deductible.
Considering Health Insurance? Here’s What You Need to Know
- Consider the type of care you really need. Do you need comprehensive health care? Is there supplemental coverage you can purchase to ease the pain of a deductible? Also, consider what life stage you're in—planning to have kids in the next 12 months? Make sure to look at plans with maternity coverage and what type of insurance they provide.
- Be sure to consider what your deductibles cover and what your plan allows. Like seeing any doctor you want? Definitely consider a PPO.
Q&A with Maria
Thoughts on the $1.9 trillion Covid relief package’s premium tax credits for exchange-based health plans?
I think it’s a start, although a temporary relief bill. The intent is to eliminate premiums for low-income individuals who are already eligible and reduce premiums for a good number of others. The bill should allow a large population of people to receive care that they otherwise wouldn’t have attempted to get in the past, and I'm hopeful that the bill will demonstrate what a relief package could do if implemented as part of the policy, not just short-term relief.
The Urban Institute estimated that similar improvements would lead about 4.5 million people to gain coverage, and that's a step in the right direction. The bill is making premiums more affordable, but the uninsured rate for low-income individuals in the lowest bracket remains high (14.1% of people with incomes between 138 and 250 percent of the poverty line are uninsured). According to the HealthSherpa, the average low-cost bronze plan in 2021 for ACA was $331 pre-subsidies. With six in 10 Americans living with less than $500 in savings and 63% living paycheck-to-paycheck since Covid, we still have a long way to go in getting Americans affordable care.
Any recommendations for those without health insurance to keep medical costs down? (Besides Spot!)
- Don't run to the ER. There are a lot of lower cost clinics if you can afford a few minutes of research. A lot of major cities have free clinics that treat injuries like sprained ankles. If you’re lucky enough to live in a city with a teaching hospital, rates can be lower there as well.
- If you need physical therapy, get a couple of different rates and ask about packages you can purchase. If you live on the border of a state and can make the drive, find out if rates in your neighboring state are cheaper, since each state is regulated differently.
- Consider teledoc services!
- If your doctor writes you a prescription, make sure they provide the generic version—pharmacies don't always provide it automatically.
- Hospitals will often negotiate your bills, especially if you’re paying cash. If you can afford to pay, set up payment in advance or coordinate a payment plan.
- Always negotiate.