Finding affordable individual health insurance can be challenging.
The good news is that there are numerous ways you can save money. Think of your health insurance purchase as a negotiation. Your have the ability to choose what level of coverage you want and how much of the financial responsibility you are willing to bear.
Here are three specific actions you can take to lower the cost of your PPO health plan.
Each one of these steps will help to reduce your premium (i.e. the monthly payment) without impacting your level of coverage or type of health insurance.
Increase Your Deductible
A deductible represents the annual cost that you will incur before your insurance company begins paying for coverage. All else equal, allowing for a higher deductible will result in a lower premium. For example, increasing your annual deductible from $1,000 to $3,000 could result in lowering your monthly premium from $175 per month to $125 per month, cutting the cost of your premium by $50 per month (or $600 per year).
Increase Your Co-Payment
A co-payment is the amount you will pay when receiving medical care, e.g. $20 per visit to a doctor. By choosing a plan with a higher co-payment you can further reduce the cost of your monthly premium.
Increase Your Co-Insurance
Co-insurance refers to the percentage a medical bill that you are required to pay. For example, if your co-insurance rate for a hospital stay is 30%, you will pay the first 30% of the cost, with your insurance company paying the remaining 70%. Many managed care plans will have both co-payments as well as co-insurance, with co-insurance applying to out-of-network medical procedures. A higher co-insurance percentage will help lower the cost of your premium.
A higher deductible, co-payment, or co-insurance level shifts a greater portion of the financial responsibility on to you, but doing so can reduce the cost of your monthly premium meaningfully, saving you hundreds of dollars over the course of a year.