Friday, December 16, 2011

How to Save Money On Family Health Insurance

Health insurance coverage is something your family should not do without. Although prescription drugs and medical bills can put a serious strain on a family’s finances, going with a health plan that offers the lowest monthly premiums could cost you more money in the end. Armed with a bit of know-how, there are ways you can save money when buying health insurance and still get quality coverage.

1. Shop Around
Since a family’s health insurance needs can differ, it pays to comparison shop. The cost varies widely among different insurance companies even for the same type of coverage and amount. Often, small or little-known companies offer the best rates. This doesn’t mean the coverage isn’t good. A company can have strong financial ratings and an excellent reputation for customer service, just not a large advertising budget.

2. Look Into Group Coverage
Group coverage can be a way to save money on health insurance costs. The coverage isn't necessarily better than that of an individual policy, but for most people, employer-sponsored group coverage is the best deal. You may have to pay a share of the insurance premiums for family coverage, but on average, group coverage saves you 10 to 25 percent on the cost of a policy. When evaluating the terms of a policy, make sure that the policy will provide adequate coverage for you and your family.

3. Choose Wisely
Avoid skimping on health insurance coverage. Find out if a policy limits lifetime benefits. Begin by determining what benefits you and your family are likely to use. Health insurance includes coverage for hospital stays and many policies cover doctor visits. Coverage for vision, dental care, prescription drugs, psychiatric care, and physical therapy and other rehabilitative services are generally optional benefits for which you pay more. Some policies exclude these services entirely; others limit the number of visits or maximum amount of coverage each year. If your employer offers more than one group plan, choose a plan that provides the best coverage for the treatment of your family’s health conditions. Review your policy annually as premium costs and network providers can change from year to year.

4. Increase the Deductible
Some health insurance plans offer the option of increasing the deductible. This can save you hundreds of dollars on the cost of monthly premiums. Taking out a high-deductible plan may be a practical choice if your family is basically healthy and you have few doctor visits each year. Before choosing this option, make certain that your finances are adequate to cover the deductible.

5. Enroll In a Managed Care Plan
Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs) are managed care plans, which offer the most comprehensive coverage at the lowest out-of-pocket costs. A disadvantage of these types of plans as compared to private health insurance is that you have less freedom of choice. Managed care plans require you to use a specific network of doctors, hospitals and other health care providers. Check to confirm that a health care provider is a participating provider in your insurance plan’s network before scheduling an appointment. Verify that the plan will cover the services you need.

Plans are available that offer you more choice, however, you pay more in the form of premiums, deductibles, co-insurance and/or co-payments. Except for your co-payments, HMO plans cover services you receive from an in-network provider 100 percent. The premium rate you pay for a PPO plan is more than that for an HMO, but it still costs less than a traditional fee-for-service health plan. A PPO plan allows you to choose any health care provider, although selecting an out-of-network provider will increase your out-of-pocket costs.

Marcia Jones enjoys spending time with her family, saves money in every way she can, and writes for

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