Want to spend less on health insurance? You’re not alone! Most of us feel like health care costs go up every year, making it harder and harder to save money. Health insurance is the most expensive part of healthcare for nearly everyone, but if you think that the cost of health insurance is a reason not to get it, you should think again. Recent studies have found that uninsured medical bills are the cause of more than half of all bankruptcies. About 530,000 American families file for bankruptcy each year due to unpaid medical bills and medical problems.
While health insurance can be pricey, having no coverage or the wrong coverage could cost you even more. The last thing you want to worry about in a medical crisis is finances. So, health insurance is a must, but there are things you can do to make it affordable. Below we’ll look at how to save money on your health insurance so you stay covered without breaking the bank.
Health Insurance Costs
The amount you pay for health insurance will depend on what kind of health insurance you have, and of course what kind of services you need. Below are all of the costs associated with having health insurance that you should keep in mind when choosing your plan.
The amount you pay each month for your health insurance coverage is called your premium. This is probably the health care cost you know best because you pay it every month, even if you didn’t use any health services during that time. The average cost of premiums monthly by tier is:
Catastrophic – $332
Bronze – $440
Silver – $560
Gold – $604
Platinum – $737
These prices vary depending on you, your plan, your insurer, and your location. Premiums can also increase or decrease yearly.
A copay is a flat fee you pay for certain types of health care. If your insurance requires a $45 copay and you go to your primary care doctor, you’ll have to pay $45 at the time of your visit. Do your homework ahead of time so you know exactly what to expect.
Deductible
A health insurance deductible is the amount you have to pay for health care each year before your insurance starts to pay for some of your costs. For example, if your deductible is $1,500, you’ll have to pay the first $1,500 of all the costs that are covered. Keep in mind that some tests and annual checkups are covered by your insurance even if you haven’t met your deductible yet. Most plans don’t count copayments toward your deductible. Depending on your health insurance plan, the details can be different, so it’s important to know what it covers.
Coinsurance
Even after you’ve met your deductible, your health insurance won’t cover all of the costs. Instead, you’ll pay a percentage of the costs until you reach your out-of-pocket maximum. Coinsurance is the part of your health care costs that you are responsible for paying. So, if your coinsurance is 15%, you’ll have to pay 15% of the covered costs after you’ve met your deductible. The remaining 15% is paid for by your insurance company. That means you will have to pay $30 of a $200 bill.
Ways To Save On Health Insurance
We’ve talked a lot about prices. You might be thinking, “Wow, that’s a lot of ways to spend money!” How can I get money back? Wonderful question. We’re glad to say that we can help. These simple ideas can help make healthcare more affordable:
Shop Around
Most people don’t think about their plan for the next year and just keep the same one year after year. If you don’t look into your options, it could cost you a lot of money because your premiums could go up or the services that are covered could change. This is why it’s important to shop around not just for price, but also for services and coverage. Plans with low premiums will have higher out-of-pocket costs like deductibles and copays. People who know they won’t meet their deductible should choose these plans, as it is cheaper monthly.
On the other hand, there are plans with higher premiums, but lower deductibles. This is better for people who need more healthcare and have a better chance at meeting their deductible. Shopping around and comparing different insurance companies and plans can take a lot of time and hard work. With our highly trained agents who are experts in your area, EZ.Insure does all the work for you. Your advisor will do the work for you and sign you up for a plan that fits your needs in terms of coverage and price- all for free.
Stay In-Network
You’ll almost always save money by going to doctors, clinics, and hospitals in your plan’s network. In exchange for being part of the plan’s network, these in-network providers agree to charge less for their services. Getting care outside of your plan’s network could cost you more depending on your plan. If you have an HMO plan it’s likely you’ll have to pay the full cost of care from a provider who isn’t in their network. If you have a PPO or a POS plan on the other hand, some of your out-of-network care might be covered, but even with some coverage, you’ll still have to pay more for going out of network.
Look For Discounts
Even after you’ve chosen the best plan for your needs and budget, you can still save money. You can also look for discounts on health care that you might be able to get. Some doctors will give you a discount if you pay for a procedure ahead of time. If you know you need a colonoscopy, ask your doctor if you can save money if you pay for it in advance.
Understand You Plan’s Limitations
All plans have limitations to what they will cover. You can’t just assume that certain services and procedures will be covered. Instead, you should read the fine print to learn about the specific benefits and limits of your plan. You don’t want to get a surprise medical bill because you thought you were covered for a service.
Consider a Tax Advantaged Savings Plan
Several plans that help you save money on taxes can help you pay for health care. People with high-deductible health plans (HDHPs) can open a health savings account (HSA). You put money into your HSA and can take it out tax-free to pay for things like deductibles, copayments, and coinsurance. Your employer may offer an HSA, but you can also start one on your own and keep the money. Employers set up and pay for health reimbursement arrangements (HRAs). Employees can’t put money into their accounts, but they can take money out for medical costs that qualify.
Employers also offer FSAs, which stand for flexible spending accounts. Employees put money into the account before taxes are taken out, and they can take money out tax-free for qualified medical expenses. HRAs and FSAs don’t need a health plan with a high deductible, but you usually have to spend the money by the end of the year, and if you quit your job, you lose the account.
Find Out If You Qualify For A Premium Tax Credit
You might be eligible for the Premium Tax Credit if you buy your insurance on the open market. The government made a tax credit for people whose household income is between 100% and 400% of the federal poverty line. This helps make the cost of getting a plan through the Health Insurance Marketplace more affordable. This is for people who make too much to qualify for Medicaid or Medicare but still can’t afford health insurance. You can apply for a premium tax credit when you file your taxes to help pay for your premiums.
Work With An EZ Agent
An insurance agent can help you compare the costs and benefits of different insurance plans to find the one that gives you the coverage you need at the price you want. We can help you deal with all of this at EZ. By working with one of our licensed, highly trained agents, you can get all the answers you need in one place. They can compare all of your plans to make sure you get the best coverage for you. They can also explain all the legal jargon in your insurance information packet from step 1. All of this is done for free! No bother, and nothing to do. To get started, enter your zip code in the box below to get free instant quotes, or call 877-670-3557 to talk to one of our agents.
Getting a large medical bill, or multiple bills can easily result in some serious debt. Healthcare services aren’t cheap, and if you don’t pay them off in time, you risk losing your assets, having poor credit, and possibly having to file for bankruptcy. In fact, medical debt is currently the leading cause of bankruptcy in the country today. When you get a medical bill, you typically have 180 days to pay it before it gets sent to collections. If you don’t pay the bill within that grace period your credit score will take a hit. A single bill sent to collections can drop your credit score by 50-100 points, and the unpaid medical bills stay on your credit score for 7 years!
Now say you use your savings to pay off your medical debt, you may not have the money to cover your other expenses, like bills or your mortgage. So now it’s a vicious cycle where one unpaid bill can turn into you falling into even more debt, losing your home, or worse. Not to mention, medical debt can then also affect your health. People with medical debt are less likely to seek medical care because they’re expecting even more debt from getting healthcare. As a result, not seeking healthcare causes your health to decline. Unfortunately, medical bills get expensive quickly, but there are steps you can take to prevent it entirely. Below we’ll look at what you can do to make sure you avoid medical debt and the downward spiral it can cause in your life.
Avoiding Medical Debt
The best thing you can do is avoid medical debt in the first place. We know sometimes that feels easier said than done, but it’s true. There’s plenty of ways you can avoid getting exorbitant bills and not have to worry about climbing out of medical debt.
Compare plans
Comparing your health insurance plan to make sure you’re getting the best coverage is the best place to start. Not all health insurance is made equal. There are plans that are better for people with less medical need and plans for people who need more medical attention. Choosing the right plan type is the key to avoiding medical debt. Afterall, you don’t want to be paying for services you don’t need or be paying for a health plan that doesn’t have nearly enough coverage. Every plan has different costs as well, so comparing prices is essential. Two companies can offer the same exact plan, but the prices can vary between a hundred dollars.
Understanding your health insurance plan
Now that you’ve selected a health plan that you feel is best for you, get to know it. Read over your welcome packet, take note of what services are covered, which ones aren’t, and which ones are free. Every health plan will have some basic health services that are covered even before you meet your deductible. Knowing what benefits you have can keep you from suddenly getting a medical bill for a service you assumed was covered. Some plans will only cover certain types of testing, or certain doctors. Make sure you know which is which.
Look at savings account options
If you choose a high deductible health plan (HDHP) you can actually also link a health savings account (HSA) to it. You can contribute money into your HSA tax-free. When you use the funds for qualifying medical expenses you can also withdraw the money tax free. This account can help you make sure you have money put away specifically for medical needs such as copays, coinsurance, prescriptions etc. Not to mention, the money in the account will never be taxed, even if it builds interest or if you invest it. That makes these accounts triple tax advantaged which is a benefit you can’t really beat.
How To Handle Medical Debt
Now, we know that you can’t always avoid medical debt, and tips to avoid medical debt aren’t helpful if you’ve already got some. So let’s look at what to do if you already have some medical bills piled up. Don’t worry, there’s steps you can take before trying to find a second job or declaring bankruptcy. You have a few options here.
Make Sure the Charges Are Correct.
Errors happen, even in billing departments. Billing departments deal with a lot of data and it’s shockingly common for medical bills to have errors. In fact, 8 out of 10 hospital bills have errors. Your invoice should be itemized, with each service and its cost listed separately. If it’s not itemized you can request one from the billing department. Check your bill for possible mistakes, like charges for services or medications you never got. For instance, if you have a bill for a hospital stay, make sure you weren’t charged for a full day’s room rate if you were discharged in the morning. There can also be typos or other errors. Look at each one and verify that each item is accurate. You can call the medical department if you have any questions or corrections.
Don’t Ignore The Bill.
Never, ever ignore those medical bills. It’s one of the worst things you can do, it guarantees that it will only get worse. The bill will go to collections and you’ll start receiving all those annoying collections phone calls and letters. This is where your credit score will take a hit, and the longer that debt sits there the worse it gets. We know it’s tempting to just “whoops” those bills into the trash but you’ll pay severely for it.
Don’t Pay It Off with A Credit Card.
It might seem like a good idea to use your credit card to pay off a medical bill. However, this is another big no-no. You’ll just be giving yourself more debt and might actually end up paying even more for the medical bill than originally had. Credit cards have high-interest payments, so carrying a balance on your credit card can lead to a never-ending cycle of debt. In turn, this can also lower your credit score. Unlike other debts, medical debts typically carry low to no interest. So, putting them on your credit card actually adds to the debt you have to pay.
Negotiate A Payment Plan.
Unlike other types of debt, there’s more wiggle room to negotiate payment plans for medical bills. Generally, as long as you’re paying something towards it they’re satisfied. You can even negotiate interest-free payment plans. Call the billing department and see if they’re willing to work with you, they’d rather get payments from you than go into collections. Even if they first suggest a payment plan that’s too expensive you can negotiate and talk them down to a more affordable number. This way they get paid and you avoid having this debt follow you for the next 7 years.
Dealing With Debt Collections
You know those unknown numbers that start calling and leaving voicemails and sending you letters about your bills being in collections? The last thing you want to do is deal with them, but you may have to. If the worst case scenario happens and your bills are turned over to a collection agency working with them is your best bet. It’s a lot easier to deal with internal collections, which are the ones that work at the hospital or doctor’s office. The internal collections departments are much more willing to negotiate payment plans, but we know more often than not, it ends up going to a third party collections agency. Here are a few suggestions to help make dealing with those agencies a little less painful.
Know What Debt Collectors Can Do.
Debt collectors actually aren’t allowed to call you an unreasonable amount of times, and they aren’t allowed to call at unreasonable hours like before 8am or after 9pm. Here are some of the debt collection rules.
Debt collectors are not allowed to report your medical debt to credit bureaus if they’ve only had the account less than a year.
If your medical debt is under $500 they can’t report them.
If you’ve asked them not to call you at your job they are legally not allowed.
They can’t threaten to sue you without a significant reason
Debt collectors are not allowed to tell you that you’re committing a crime by not paying them
They can’t threaten to tell others about your debt (except for your lawyer or spouse)
Debt collectors cannot ignore your debt validation request either. If you send them a letter saying you want to verify that the debt is legitimate, they can’t contact you before responding to that letter.
Document Everything
Conversations with debt collectors can quickly get heated, but debt collectors are legally not allowed to harass or threaten you or use intimidating language. So, be sure to record all phone conversations with debt collectors. Once you reach a payment agreement, make sure you ask for it in writing. Don’t make any payments before you get the physical document stating exactly how much you have to pay. Then keep proof of payment. If your debt is ever questioned, you will be able to show that you paid the agreed amount.
Negotiate With Debt Collectors.
Obviously, debt collectors want full payment, but be firm and offer to pay what you can afford. They will likely agree. They will most likely have a counteroffer. Ultimately that’s their job- to get as much of this debt paid as possible. It looks better on your credit report if you can pay off the debt in full. But chances are you can’t. So, offer to pay what you can afford and don’t accept an offer that you won’t be able to meet.
Working With EZ
As we said in the beginning, avoiding medical debt is your best bet. And the best way to do that is to get the best health insurance plan for you. At EZ we can help you compare every plan available to you and find you the one that fits your needs and stays within your budget. We can actually save you hundreds of dollars a year by just choosing the right plan. To get started, enter your zip code into the bar below for your free instant quotes. Or give one of our licensed agents a call at 877-670-3557.
Each year, the IRS sets contribution limits for Health Savings Accounts (HSAs). This year, HSA contribution limits are up by about 1.5% from 2020’s amount. New contribution limits for 2021 are going up $50 for individuals and $100 for families. Limits are set based on a calendar year. and the allowable contribution is prorated by the number of months an individual is eligible to contribute to an HSA.
A HSA is a tax-exempt savings account that employees can use to pay for qualified health expenses. Individuals eligible to contribute to a HSA can make contributions to it at any point during the tax year. To be eligible for a HSA, one must:
Be covered by a qualified high deductible health plan (HDHP)
Not be enrolled in Medicare
Not be claimed as a dependent on someone else’s tax return
Based On Inflation
Contribution limits for the following year are based on the rate of inflation. To determine this year’s contribution limits, the IRS used a 12-month period calculation ending in March 2020. The annual limit on HSA contributions for this year is $3,600 for individuals and $7,200 for families. Employees aged 55 and older with a HSA account can contribute an additional $1,000 on top of the maximum as a catch-up contribution to support their savings as they near retirement.
High deductible health plan out-of-pocket limits went up for both self only coverage and family coverage.
Contribution limits are not the only things that are affected by inflation. Each year, the IRS also sets minimum deductible amounts and maximum out-of-pocket limits for HDHPs. For 2021:
Self-Only Coverage with a HDHP:
Minimum deductible for a HDHP to be HSA-qualified: $1,400 ($0 change from 2020)
Maximum HDHP out-of-pocket limit: $7,000 ($6,900 in 2020)
Family Coverage with a HDHP:
Minimum deductible for a HDHP to be HSA-qualified: $2,800 ($0 change from 2020)
Maximum HDHP out-of-pocket limit: $14,000 ($13,800 in 2020)
What You Should Do
As an employer, you need to make sure that your employees are aware of these new limits. Communicate to your employees that:
The out-of-pocket maximum for a family high-deductible health plan is $14,000.
All non-grandfathered plans have to cap out-of-pocket spending at $8,550 for any covered person. A family plan with an out-of-pocket maximum of $8,550 can meet this by embedding an individual out-of-pocket maximum in the plan that is no higher than $8,550.
High deductible health plans cannot have an embedded family deductible that is lower than the minimum HDHP family deductible of $2,800.
HSAs are a great savings tool to have in your belt. Offering them to your employees will lower your group insurance costs, while allowing employees to help pay for their medical expenses. If you are interested in offering your employees insurance or a HSA, an EZ agent can help. We will do all the research and comparing for you and find you the plan that will best suit your business. To compare quotes within minutes, at no cost, enter your zip code in the bar above, or to speak to an agent, call 888-998-2027.
When we pay for health insurance, we want to know that our money is going where it should be going. Contributing to premiums can be expensive, and until recently, we’ve had to trust that insurance companies were doing the right thing and putting those premium dollars towards getting the best care possible. Thankfully, insurance companies are now required by law to spend a certain percentage of premiums on medical costs as opposed to administrative costs. If they don’t, you will receive a medical loss ratio (MLR) rebate.
Background of the MLR Provision
Insurance companies are required by law to spend a certain percentage of premiums on medical costs. If they don’t, you will receive a medical loss ratio (MLR) rebate.
Before the Affordable Care Act (ACA) was passed in 2010, insurance companies could decide for themselves how much of your premium dollars went towards medical costs and quality improvements, and how much went towards their administrative costs. If an insurance company had particularly high administrative costs, then you were stuck paying their bills and getting less in return. You had no recourse, and most likely, no way of knowing.
While some states had minimum standards before the ACA, there were no nationwide standards, and little review or enforcement. However, the ACA set a standard maximum percentage of premiums that insurance companies are allowed to put towards their own administration, marketing, and profits. Insurance companies are now also required to publicly report their percentages in each state where they operate. What’s more, if they don’t meet these standards, you can look forward to getting a MLR rebate.
The Standards
So how much of your premium dollars need to go towards actual healthcare? If you are a small employer (less than 50 people), then 80% must be spent on care and improvements. If you are a large employer, that number rises to 85%. That means that up to 20% of small group plan premiums still goes in the pockets of the insurers, but you can rest assured that it will never be more than that.
The Rebates
Insurers failing to meet the standards must pay a rebate based on a 3-year average of their financial data. While most seem to meet the requirements, many rebates have been paid out to policy holders since 2012. In 2019, insurers returned $312 million to the small group market, which broke down to an average of $1190 per employer. Most of that (93%) was given back as a lump sum. So if you do receive this money, what do you do with it?
What Do You Do with an MLR Rebate?
If you do find yourself with one of these MLR rebate checks, it is your responsibility as an employer to use it a certain way. There are a few steps you should follow when figuring out how to deal with this rebate:
Determine which plan the rebate applies to – generally, the rebate only applies to one plan that an employer has offered (such as a PPO or HDHP), and can only be given to employees who are participating in that plan.
Determine how much of the rebate relates to employer contributions vs employee contributions towards the plan’s premiums – if you are contributing to your employees’ premiums, then you can keep the same percentage of the rebate as the percentage you have contributed. The rest is considered “plan assets” and must benefit your employees. So, for example, if employees contribute 50% of the premium, then 50% of the rebate would need to be used for the benefit of plan participants.
Determine who will get the rebate– distribution of the rebate only needs to be “fair” and “reasonable.” You don’t need to spend all your time figuring out exactly how much each employee contributed and give them each an exact percentage. You can make it easy on yourself and give a flat amount to everyone. You can also decide to only give the money to current plan participants if it will cost you too much to distribute it to everyone who ever participated in the plan.
Determine how to distribute the rebate– you have four choices of ways to give the rebate to your employees:
Cash
Premium reductions
An added benefit
A premium holiday
Thanks to provisions in the ACA, you can now feel a little bit more comfortable knowing that your premium dollars are being put towards the health of you and your employees.
Anything that adds transparency to the insurance market is definitely a good thing. And so is a little bit of money back in your pocket!
Most people don’t think about their plan for the next year and just keep the same one year after year. If you don’t look into your options, it could cost you a lot of money because your premiums could go up or the services that are covered could change. This is why it’s important to shop around not just for price, but also for services and coverage. Plans with low premiums will have higher out-of-pocket costs like deductibles and copays. People who know they won’t meet their deductible should choose these plans, as it is cheaper monthly. 
