How can you reduce the cost of health insurance premiums?

Answer 1

With respect to private health insurance premiums, three of the main ways to do this is by selecting a higher individual or family deductible, choosing a higher co-payment, or opting for a policy that is something less than full-fledged "major medical" insurance

A deductible is tha mount of money that you essentially self-insure for. That is, medical expenses must be incurred, and paid for by you, up to the selected deductible before the insurance company is obliged to pay further expenses. Therefore, if a higher deductible is selected, the insurer is not on the hook until a greater amount of medical expenses have been incurred, and it can charge a lower premium. Keep in mind, though, that you may not end up with a net savings because you will be personally liable for the increased amount of medical expenses. It is a gamble, but if you are in good health,and/or have savings upon which you can rely, it may be one that you are willing to take.

A co-payment is in some ways similar to a deductible (but not really). It is the amount of money that you are required to pay toward the cost of a covered procedure. It is sometimes expressed as a fixed dollar amount (such as $25 for an office visit), or as a percentage of the cost of a procedure. Again, the higher the co-payment that you select at the inception of the policy, the lower your premium will be. The reason is similar to the idea of a deductible: the insurer's responsibility for payment is lower and it can afford to charge a lower premium.

Finally, there are health insurance products available that are not full-fledged ones--they are sometimes called "mini-meds". They often have a cap on the amount payable per year or for a given procedure. In that case, you would be individually responsible for all other amounts.

Never confuse these types of health insurance policies (broadly called "indemnity" policies) with discount plans. Discount plans have their place and their value, butnthey do not assume the risk of payment of any loss. That is, they contract with providers to render care to plan members at a reduced fee, but the member if fully responsible for the payment of the fee to the provider.