8 Ways to Save Money on Health Care and Health Insurance

Sure, health reform was signed into law a year ago on Wednesday and meant to make health care and health insurance more accessible and affordable for more Americans. But many of the enactment’s provisions don’t kick in until 2014. In the meantime, here are eight ways you can save money–right now.

1. Lock in That Rate. When you’re purchasing private health insurance for yourself or your family, keep in mind that your insurance company may periodically increase your monthly premiums. One way you can temporarily protect yourself is to look for a “rate guarantee” when shopping for coverage. Work with a licensed broker who represents a large variety of health insurance companies to find out which companies offer rate guarantees. Some carriers may automatically lock in your rate for the first year of your policy.

2. Right-size Your Health Insurance Plan. If your current plan is getting too expensive to keep, but you’re afraid of being declined for new coverage based on your medical history, make sure you explore your options. Work with a broker who has the experience and resources to negotiate with your carrier directly. You may be able to stay with the same insurer and transfer to a more affordable plan without undergoing medical underwriting and running the risk of being declined. There are trade-offs, of course. You may need to accept a higher deductible in return for a lower monthly premium. But the new plan may still provide you with valuable protection in case of serious illness or injury, and you may be able to trim a substantial amount from your monthly bill. Make sure you ask questions and get as much information before making a final decision.

3. Negotiate Your Medical Bills. Did you know that you can potentially shave up to 30% off your medical bills by negotiating with your medical care provider? Health insurance allows you to benefit from discounted rates for health care services. Chances are, your insurance company has negotiated discounts with providers ahead of time. If you’re currently uninsured, you’re not benefiting from those discounted rates, so the charges listed on your medical bill may be substantially higher than others are expected to pay. Talk to your doctor or your hospital’s billing department to see if you can negotiate a discount by paying up front or creating a payment plan. Even if you have health insurance, that doesn’t mean all your medical procedures are automatically covered. If you’re seeing an out-of-network physician or receiving medical services not covered by your insurance plan, you may be charged the full rate. In these circumstances, even insured patients should negotiate their bills.

To learn more about negotiating medical bills, visit the Healthcare Blue Book website, where you can find suggested prices for many standard medical services. If you’re surprised by an especially high medical bill and you need help negotiating payment, you can work with a professional medical bill negotiator. Some negotiators are paid only on a contingency, based on how much they are able to save you.

4. Consider Generic-only Prescription Drug Coverage. Find out if health insurance companies in your area offer generic-only prescription drug coverage. If you rarely use prescription drugs but don’t want to go entirely without drug coverage, you may be able to save on your monthly premiums. As a supplement to your insurance coverage, a prescription discount card may help mitigate the cost of a brand-name drug, should it become necessary to take one. Just be sure that any discount card you purchase is accepted by your local pharmacy.

5. Look into a Health Savings Account (HSA). An HSA is a tax-advantaged savings account used in conjunction with a health insurance plan. Account contributions, qualified distributions and earnings are all tax-exempt. An HSA allows you to deposit a portion of your pre-tax income into a savings account and use those funds to pay for qualified medical expenses. Unused money can be invested and accrue from year to year. If you have an HSA, be sure to deduct your contributions up to federally prescribed limits. Contributions to your HSA designated for 2010 and made before April 18, 2011 can be counted toward your 2010 federal taxes. According to IRS Publication 969, HSA contributions for the 2010 tax year are capped at $3,050 for individuals and $6,150 for families.

6. Shop Smart When Shopping a la Carte. When shopping for private health insurance, you can save money by only considering plans that offer the specific benefits you need. For example, a 2010 survey from eHealthInsurance showed the average individual health insurance customers saved $77 per month on premiums when they selected an insurance plan without maternity benefits (in states where these plans are allowed). By selecting an insurance plan that excludes benefits like robust maternity coverage (not necessary for a single male, for example) or chiropractic and mental health coverage, you may see significant savings on your monthly premiums. Given the choice between going uninsured and cutting benefits for services you may not need, limited coverage is better than none at all.

7. Look Beyond Your Employer’s Plan. If you can no longer afford your share of the premium for an employer group health insurance plan, consider your options in the private health insurance market during your next open enrollment period. While it may not always offer the same benefits, coverage purchased on your own is sometimes less expensive than what your employer may require you to contribute toward your monthly premiums. Employer-sponsored coverage is especially valuable for those with pre-existing medical conditions who may be declined for coverage elsewhere, but healthy individuals should consider all of their options before selecting a health insurance option.

8. Split up the Family. Different people have different health insurance needs. This is true within families too. You may be able to save money by covering family members under two or more separate health insurance plans. For example, if one family member has heart disease or diabetes, you’ll want to keep that person covered under an employer-sponsored health plan or COBRA, since they could be declined for coverage elsewhere. However, you may want to cover your healthy teenager, for example, under a more affordable individual health insurance policy of his or her own.Ask your human resources representative or benefits administrator for more information about how much you can save by removing a dependent from your employer-sponsored plan. Then go to an online marketplace with a large selection of health insurance plans in your area to compare that amount to quotes for privately-purchased health insurance. Be sure not to drop any existing coverage for a dependent until he or she is officially accepted for coverage under a new health plan.

Keith Mendonsa is a consumer health insurance specialist with eHealthInsurance.com, a website where consumers can get quotes from leading health insurance carriers, compare plans side by side, and apply for and purchase health insurance.