Purchasing an individual health plan doesn’t have to be time consuming or frustrating. There is an abundance of affordable health insurance plans available for individuals and families whether, they are self-employed or chose to opt out of expensive employer health coverage. There are, however, a few things that you should know before investing in individual health insurance.
Only pay for what you will need
Do you go to the doctor every time you have a cold? If you are the type of person who is comforted by seeing a doctor every time you don’t feel well, consider a health plan with a low deductible. You will pay more in premiums but will not have to face the burden of paying the first $1,000 to $5,000 of medical expenses. Most people, however, don’t run to the doctor every time they have a fever or the sniffles. Most of us view health insurance like homeowners insurance or car insurance. If you want health insurance to protect you from the financial liability associated with injuries and disease, then consider a health plan with a higher deductible. In most cases, a higher deductible means a lower monthly payment.
Consider your options if you qualify for group coverage
Traditionally, employers offer health insurance to employees and their family members. An increasing number of family members are opting out of employer coverage in favor of less expensive individual plans. It’s not uncommon for employees to have hundreds of dollars deducted from their paycheck to cover medical insurance for their families. Take the time to add up those weekly deductions and you might be in for a surprise. If you suffer from chronic medical conditions, employer-sponsored coverage may be your best option. If not, shop around for a better deal.
Always comparison shop
As with any important financial decision, you need to comparison shop! It may not be “fun shopping” but you can reap the rewards if you periodically check your current health plan against others available. Like car insurance, you may find that you’re not getting the most from your health care dollars. Research plans from a variety of carriers. You could find a plan that works with your preferred hospital or medical group for the same price you’re currently paying. You might also find a plan with a lower deductible at your current monthly premium level.
Explore tax-saving opportunities
Shouldn’t health care be tax-free? It can be if you’re a savvy shopper. Many self-employed individuals can deduct their premiums from their income to reduce their taxable income. Thanks to Health Savings Accounts (HSAs) you can purchase a low -cost health plan linked to a tax-advantaged savings account. These plans can be less expensive because they have a higher deductible and they allow you to save pre-tax money in a special account similar to an IRA. The best part is, you can spend money from the account on medical expenses without any penalty and the money you don’t spend rolls over from year to year until you reach retirement age. As with any financial decision, you should consult your tax advisor to be sure to utilize this new tax savings tool to your fullest benefit.
Health insurance may not be fun to spend your money on, but you need it, and being uninsured can be scary. Just remember to periodically compare prices and benefits from other health plans to ensure you are getting the best deal for your hard earned cash.
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