Best way to save money when buying medical insurance: Understand how plans work
By: MultiCare Group
His advice, especially for families and those who are currently uninsured and looking to buy a new plan, to keep costs low include:
• Understand how insurance plans work, including whether you want/need a copay plan and how deductibles work. Be practical about what you need and find the plan that fits those needs.
• Verify if your doctor is a provider with the health plan you are considering. If they aren't and you aren't willing to change your doctor, you could end up with a plan that doesn't suit your needs.
• Know your out-of-pocket maximum and feel comfortable with it. All copay plans right now are considered catastrophic plans and have a $7,900 out-of-pocket maximum.
• Consider a Health Savings Account, which has lower premiums, lower net out-of-pocket costs by about 20 percent, no copays, tax credits on medical claims and more benefits. Ensure you understand the details of such an account to determine whether it best suits your lifestyle (although Casale believes the HSA is the best option for all lifestyles).
• If considering an HSA and you are married, make sure to know whether the deductible is aggregate (a combined family deductible) or imbedded (each person is responsible for a separate deductible). "Knowing the difference can save you thousands of dollars," Casale said.
• Look at the tax benefits. With an HSA, the insured can write off 100 percent of medical claims, which helps drive overall costs down. Generally, unless you have an HSA, you don't get a tax deduction on medical claims because by law, your out-of-pocket maximum must exceed 10 percent of your adjusted gross income to get tax benefits.
• Understand how the prescription benefits are going to work for you. Know whether your prescriptions are generic or brand name. If they are generic, you can buy a cheaper plan because generic costs will stay the same. If they are brand-name or Tier 3 prescriptions, they can be expensive, especially on certain plans.
• When going to the doctor with a plan that includes a wellness benefit, annual physicals/checkups are covered 100 percent. Ensure your provider categorizes the visit as the annual physical, not a follow-up to another appointment or else you will be responsible for the copay/balance.
Casale offered a real-life example of how he helped a family save money on insurance:
One of his clients is a single mom of two kids whom he knew would meet the out-of-pocket maximum (an extra $2,500 a year) within a few months, so he set her up with a Health Savings Account. She was not only able to lower her out-of-pocket maximum, but she put aside the maximum allowed under the HSA ($7,000) for medical costs, which she was able to write off at tax time. Her premium also went down about 25 percent. In total, she saved about $10,000 a year.