Find Cheap Health Insurance through an HMO (Health Maintenance Organization) or a PPO (Preferred Provider Organization). The savings over an individual health insurance policy is substantial, however you lose the freedom to choose your doctor. Cheap health insurance plans offer services through a “network” of health care providers. Most of these health insurance plans require a copay and some have a yearly deductible. If you receive all of your health care through the approved network there are no claims to file. If you choose a provider outside of the approved network you will likely have to pay most or all of the costs.

A HSA (Health Savings Account) is another popular option for those looking for cheap health insurance. An HSA functions like an individual retirement account (IRA) coupled with a high-deductible major medical health insurance plan (HDHP). The great advantage of an HSA is that you pay for your deductible as well as elective dental and medical expenses with IRS pretax dollars. For most people, that amounts to a 25% to 30% savings on their medical and dental bills.

As with an IRA, your HSA is income tax deductible, and interest on the account is tax sheltered. The maximum yearly amount that you can add to your account is set by the government. For people age 55 and older, an additional “catch-up” amount is allowed. Go to www.ustreas.gov, and the Health Savings Account link for full information. For the HSA contributions to be tax-deductible, you must also have an IRS-approved HDHP (high-deductible health plan). The HDHP must include a minimum and a maximum deductible option set by the government each year. There is no coverage under the insurance policy until the family deductible is reached in a calendar year. There is usually an option for 80% copay as well as 100% coverage after the deductible is met.

Use your HSA to pay the deductibles and most other dental and medical expenses that your health plan doesn’t cover (such as glasses, contact lenses, laser eye surgery, hearing aids, and dental work). Because the HSA has never been taxed, you’re paying medical bills with pre-tax dollars — a big advantage. If you stay healthy, you can leave the unused amount on deposit for the future medical bills or save it as a retirement fund. If you don’t use the account for medical expenses, withdrawals are taxed like IRAs when you retire.

You can establish an HSA wherever you can set up an IRA — insurance companies, banks, savings and loans, etc. Since you will probably want to write checks to pay for doctors and prescriptions. A bank account with checks and debit card may be the most convenient.

The following simple steps may make your life easier when using an HSA to cover the deductible and other expenses.

  • Don’t pay any pharmacy or medical bills until your insurance company has negotiated the discount pricing.
  • Deposit into the account early so you have plenty of cash available for any sizable medical bills in the first quarter of the year.
  • Keep all receipts that you’ve paid through your HSA (pharmaceutical bills, medical bills, dental bills, etc.) in case you get audited. Go to www.irs.gov Publication 502 for a list of IRS-approved medical and dental expenses, or call 800-829-3676 and have it mailed to you.
  • Quit smoking if you want cheap health insurance. Unlike group health policies, almost all personal health insurance policies classify smokers from nonsmokers because claims costs for smokers are so much higher. Health insurance companies don’t offer individual policies to people who are medical high risks, which means that everyone else — from the super fit and healthy to the not so fit and healthy pay the same premiums and share the losses.

powerwalking cheap health insuranceSo, if you take good care of yourself through diet, exercise, rest, stress management, and personal safety, but companies don’t offer discounts, how can you get cheaper health insurance? The answer is choose higher deductibles. The difference in premium between a $200 and a $1,000 deductible with some insurance companies is 50%. As your family or age increases, that 50% can save you a fortune. While you’re assuming $800 more risk per year, if you’re paying $4,000 a year just for yourself, 50% would save you a whopping $2,000 in premiums.

Pricing at every level of deductible is based on average risk. No matter what level of coverage you choose, if you’re much healthier and fitter than average you’re paying more than your share. Choosing higher deductibles will save on your insurance costs. Being healthier than average, your chances of using that higher deductible are much less. If in doubt, take the lower deductible, since you can always raise it later. But to lower the deductible, the entire family must qualify medically (which may not happen if you’ve just experienced some big medical bills).

You may be refused a policy because of a preexisting medical condition, or your group coverage may have ended because you lost your job. If you or someone in your family has been rejected for individual coverage because of a health condition for which you can’t get insurance, you will need to broaden your way of dealing with the problem. There are many challenges to confront in today’s expensive health care universe, and you will without a doubt face tough decisions in your search for cheap health insurance. However, there are very few people who can’t get health coverage if they’re willing to make some life changes.

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