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Cutting Health Insurance Costs
By: Tony Nokak
Surveys of self-employed individuals consistently
show that one of their major concerns is the ability to buy affordable
health insurance. One in 4 self-employed persons has no health
insurance today even tough more than 70% of these people could afford
to buy high quality health insurance if they had an effective buying
strategy.
1. Have a budget and set realistic expectations.
Realize that the purpose of insurance is to cover unexpected and
otherwise unmanageable expenses. Most good plans cover "ordinary
and necessary medical expenses" but not your health club membership.
Look for coverage that provides protection but avoid being drawn
in by the marketing sizzle. Do not buy health insurance with the
primary intention of picking up the cost of your existing ordinary
medical expenses like prescriptions, routine dental care and annual
check-ups. Health plans exist for almost every budget. Remember
that no one is excluded from receiving medical care for an acute
condition because of the type of their health insurance plan, but
rather medical treatment may be denied because they don’t
have any insurance coverage at all.
2. Realize that there are trade-offs in every
health plan. The lowest priced high quality health
insurance plans excluded coverage for pre-existing medical conditions
and require periodic re-enrollment. It is often better to take the
less expensive insurance any pay for small uncovered expenses yourself.
But if you need to find “full takeover” coverage, then
you cannot expect to be offered the insurer’s lowest rating.
3. Think short term. Most individual health
insurance policies for self-employed persons actually stay in force
less than a year. Buy the plan that offers you the best deal right
now and do not worry about whether it will be available in a year.
In 12 months, a whole new generation of health plans will be available.
It would not be smart to keep the same plan for more than two years
because new plans are evolving rapidly. A plan that you bought more
than 2 years old would not likely represent the best value for you
today.
4. Use student medical plans and foreign
travel plans if you qualify. These plans offer better deals than
traditional coverage.
5. Choose a higher deductible. By taking
a $1000 deductible, you will save more than $1000 in premium payments
over a year's time. This should be an easy decision from a mathematical
viewpoint, but still many people buy policies with a low deductible.
It makes no financial sense to pay an insurance company $1000 in
premiums for medical care that you could buy for $600 cash.
6. Choose indemnity type coverage and avoid
HMOs. This lets you and the doctor that you choose maintain control
of your own medical care. This saves money in the long run by allowing
the best course of treatment from the outset of any medical condition.
7. Use the Internet. Technology now allow
for online pricing and enrollment with policies issued within 24
hours. Savings have resulted in lower premium prices. Some plans
offer premiums as low as $25 per month for catastrophic coverage
for young people so it is well worth checking out some health
insurance quotes.
8. Avoid the scams. Unfortunately, self-employed
individuals are a prime target market of numerous health plan marketing
scams. State insurance departments continuously shut down disreputable
plans, but new ones sprout up just as quickly. Well-established
and reputable health plans are obtained from well-established and
reputable distributors. Good health plans do not use multi-level
marketing schemes. All individuals handling your health plans enrollment
should be licensed, bonded and insured. Beware of individuals who
claim that they do not need an insurance license in your state or
can not provide evidence of errors and omission coverage or a bond
issued by an insurance company. Remember the old adage “if
it sounds too good to be true…”. This certainly applies
when shopping for health insurance.
You can find more Health
Insurance Information here
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