Low-Cost Health Insurance for Everyone
Low-cost health insurance is universally desired but means different things to different people. If you're generally healthy with a favorable family medical history but have a low-wage job, you're probably looking for a low-cost plan with a medical plan that will do little more than prevent you from going broke from a medical affliction or bodily harm.
Luckily, there are plenty of quick and convenient options out there for finding low-cost health insurance.
"Consumers have more options and choices in shopping for insurance than ever before," says Robert Hartwig, past president of the Insurance Information Institute. "They are also able to compare those options with greater ease than they have in the past."
If, on the other hand, you're a successful entrepreneur with a high-risk family history, you're looking for a way to get more comprehensive health coverage, and low-cost health insurance might mean anything that doesn't cause a heart condition brought on by sticker shock.
No matter what your situation or your definition of low-cost health insurance, here are some of strategies for and consequences of driving down your health insurance costs.
Types of low-cost health insurance
There are dozens of policy types and coverage tweaks that can help lower your health insurance. The biggest cost variable is your medical history, but the following three categories hold the biggest potential for low-cost health insurance for things within your control.
High Deductibles: As most people know, health insurance deductibles, or co-pays, determine what you must pay for medical treatment. Often, these co-pays are tiered based on the medical service provided. For example, you may have to pay $30 to visit your primary physician, $50 to the pharmacy for a round of antibiotics or painkillers, and $100 for a trip to the emergency room.
The higher these co-pays, the lower your premiums will be. Some high-deductible health insurance plans, however, set annual deductible limits that force you to pay the first thousand dollars or so in medical costs each year, but will cover most or all of medical costs incurred above this limit.
Co-Insurance: One policy choice that may allow you to find low-cost health insurance is co-health insurance. Rather than a co-payment, this type of health insurance requires that cover a percentage of medical costs. One common type of co-insurance is 80-20, where the insurance company pays 80 percent of the costs and the insured pays other 20 percent. So if you have appendectomy that costs $10,000, the insurance company will pay $8,000, and you will have to pay $2,000.
Most co-insurance health plans also incorporate something known as a stop-loss limit, which places a cost threshold, after which the insurance will pay 100 percent of the costs. These numbers can be personalized for your situation, however. If there is a foreseeable possibility of major medical costs, you will want a health plan that uses a lower stop-loss limit, even if you decide to go with a 70-30 co-insurance rate.
If the chances of astronomical medical costs are unlikely but you tend to frequent the doctor's office, a 90-10 co-insurance rate with a higher stop-loss limit may be right for you.
Lifetime Caps: Another policy choice that can yield low-cost health insurance premiums is lifetime caps on health coverage. Health insurance companies like the fact that this type of policy easily and definitively measures the amount of financial risk you pose. It also carries higher risk for the policyholder, especially in certain circumstances.
You should stay away from this option if you're insuring children under this plan because a lifetime limit might be reached tragically early. You should also rethink a lifetime cap, if your family medical history suggests you may require long-term care. Early onset dementia (any dementia that presents itself before the age of 65) is one example of an affliction that will require long-term care and quickly cause these caps to be hit
Low-cost health insurance shouldn't be low-value
No matter how you go about reducing your health insurance costs, you don't want to sacrifice the overall value for low-cost health insurance, and there are a few simple ways to determine whether you're getting good value for your insurance dollar.
Be sure to ask prospective health insurance companies how much of their collected premiums are returned to customers in the form of health benefits. With investment returns on collected premiums, the average health insurance company is able to return about 99 cents on the dollar for health premiums.
Collected premiums and investment returns combine to create total revenues for an insurance company. Minus administrative costs and an average 2-3 percent profit margin, a responsible health insurance company should be able to pay out at least 70 percent of its total revenues toward health benefits.
The best choices for low-cost health insurance are made when you're able to review this cost breakdown for several health insurance companies, and that's where NetQuote comes in. Fill out our quick, online form to start talking to health insurance companies today.