health insurance Archives - Smart On Money

How To Avoid Rising Healthcare Costs

The downgrade of the U.S.'s credit rating from AAA to AA may not seem to directly impact you yet. Sure, gas prices have dropped which is beneficial, but there are other costs that will soon rise looming on the horizon – and food and healthcare costs are just a few of those expected to increase in costs.

Healthcare, in particular, is expected to see a spike in price, and those enrolled in medical and nursing schools are already gearing up for the challenge these price hikes with bring. Higher prices will generally prevent individuals from seeking health care services until they are already too sick. However, there are ways to keep your health care costs low while still receiving the quality care you need to do the following things.

Health Care Costs

Know What Your Insurance Offers

Because of the rising costs in healthcare, you need to remain aware of any changes that may occur in your health insurance. Some providers may change the amount they are willing to cover for certain procedures, or reduce the number of cost-free visits they allow. They may also increase your co-pay. To ensure that you aren't left with large bills, review your health insurance policies to determine what is and isn't covered.

Choose Urgent Care over Emergency Room

Most health insurance policies offer a good co-pay rate for urgent care visits, but offer little help for emergency room visits. Emergency room visits often cost triple the amount of an urgent care visit so if you can stand to wait, always choose the urgent care unit. A sprained ankle or a cut may hurt now, but a $400 bill from the emergency room will sting a lot worse than the $50 you would have paid for the urgent care visit.

Choose Out-Patient Services

Hospitalization is one of the highest costs to any patient, and as health care costs increase you can expect that $9 band aid to increase to a $15 band aid. If you must have surgery, opt for an out-patient or same day surgery. You won't have to pay for overnight expenses, and your hospital bill will be practically cut in half.

Always Review Your Bills

The healthcare industry frequently makes errors when billing individuals. Hospitals and clinics deal with hundreds of patients on a monthly basis, and on occasion, a patient is billed for another patient's procedures or medical supplies used. Always review your bills before paying so that you only pay for the treatment you received.

Take Care Of Yourself

While we can't always avoid getting sick, we can take better care of ourselves to prevent frequent sickness. Try to maintain a balanced diet, exercise, drink plenty of fluids, and take a multivitamin. Also, routinely give yourself the appropriate self-examinations so that you may find small issues before they become large health concerns and possibly large bills.

Everyone is trying to reduce their spending so that they can survive the downturned economy, but you shouldn't have to risk your health to do so. Healthcare may be expensive, but you can avoid paying outrageously high prices by simply remaining aware of who is taking care of you and the treatments you are receiving.

Saving Money On Health Care: Health Savings Accounts (HSA)

By Miranda Marquit 2 Comments

It's health plan renewal time for me. Every year, we go through this. In the last six years, my family's monthly insurance premium has nearly tripled — and our benefits have decreased. Have we had major health challenges? Nope. Each individual in my three-person family has only one or two doctor visits a year. We don't have new prescriptions. We don't have any pre-existing health conditions. We live a relatively healthy lifestyle. But the premiums keep going up.

Apparently, “administrative costs” are rising faster than anything else in the world of health care. (Maybe that's just my frustration talking.)

At any rate, this year I'm doing something about it. I've sent in a change of plan form, switching to a high deductible health plan that costs half as much as what I'm paying now. No, my current premium isn't a budget buster. But I am frustrated that so much money goes, with no benefit to me, into the pockets of insurance company execs. I figured out how much it would cost to pay everything out of pocket, and it's a fairly small fraction of what I've been paying in premiums for the last three years. The only reason I have health insurance is because of the worry that something expensive could happen. The new high deductible plan would help me keep more of my money for me, while at the same time making sure that my family is protected against unexpected health issues.

Health Savings Account

HSA: Saving Money On Health Care

There are a number of things you can do to save money on health care, from asking for discounts at hospitals and doctor offices, to joining a prescription plan. A Health Savings Account can help you put your money work to you. When you have a high deductible plan, you pay a lower monthly premium. I plan to put the amount that I save in premiums in the HSA. I'll still be paying the same amount, so it won't change my spending plan, but the money will be to my benefit. Here are some of the ways that a HSA can be of benefit:

Contributions are tax-deductible.
You can withdraw for medical expenses without tax liability.
Money rolls over year-to-year.
The HSA can act as a back-up IRA. It has the same rules as an IRA, so if you don't use the money for qualified medical expenses, you are subject to the same penalties if you aren't 59 1/2 (and to taxes if you are).
You can use the money in the account to pay out of pocket medical expenses, including co-pays.

It's important to realize, though, that a HSA isn't for everyone. It works best for those who are reasonably healthy, without chronic conditions. Because the high deductible means you will be responsible for more costs for longer, expensive chronic conditions can be even more expensive with this arrangement. So, carefully consider your options, and what would work best for your financial situation. In some cases, you might find that a high deductible plan, paired with a HSA, could help you control more of the money in your budget.

Financial Perks Contractors Can’t Take for Granted

By Miranda Marquit 4 Comments

In the world of employees with stable jobs and benefits, there is a lot that can be taken for granted. The self-employed, home business owners, contractors and freelances, though, can't take many of these benefits for granted. Indeed, before leaving their jobs, they often neglect to think about the value of the benefits they receive from work. A story last year on CNN Money claimed that many workers actually cost their employers 25% to 30% — or even 40% — on top of their base salaries.

Those who do not work as employees with benefits, though, don't see the benefits that many workers take for granted. Before you decide that you would be better off on your own, consider the following financial perks that contractors can't take for granted:

Cost of facilities: Your employer pays for your workstation and the supplies in it. Power, water, phone and other utilities are also paid for the company. In many cases, you can even get reimbursed for mileage that you drive on behalf of the company. Once you strike out on your own, whether you are telecommuting or doing some other kind of work, all of those expenses are entirely yours.
Taxes: Many workers, as they look at the money withheld from their paychecks for taxes, don't realize that some taxes are partly covered by their employers. Indeed, there are payroll taxes that your employer is covering, including half of your Social Security tax. Once you are on your own, you pay the employer side as well as the employee side, meaning that your taxes could go up — even if you don't make any more money.
Health insurance: You might gripe about the rising cost of health insurance premiums at work. However, many employers pay a portion of the premiums. When I quit my job to go back to school, I considered COBRA. Then I realized that I would be covering the entire cost of the premiums. I was shocked to realize how much my employer had been paying. Now self-employed, I pay my entire health insurance costs — not contributions from someone else. I did find a reduced price, though, by getting a group plan through an aggregating site.
Retirement plan: When you work for someone else as an employee with benefits, you get help with a retirement plan. Your employer offers different options, and you can have money automatically withdrawn from your paycheck to make saving for the future a little easier. As a contractor, though, you are on your own. No employer matches. You have to look at your options, usually different types of IRAs, to determine what works best for you. You have to remember to make contributions, or set up an automatic debit (and don't spend the money before it can be taken out).
Worker's compensation: If you are injured on the job while working for someone else, your employer picks up the tab for worker's compensation insurance that helps cover your costs. If you are a freelancer, you have to be prepared to cover the costs with your own health insurance, or with the help of disability insurance.

And, of course, one can't forget paid vacation days and other perks. It's true that there are many perks associated with working for yourself. But, before you can weigh the pros of working for yourself, you also need to consider the costs that can come with working on your own.

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