How to Save Money on Health Insurance

Ask one of Dave's health insurance ELPs if an HSA is right for you

from daveramsey.com on 02 Sep 2009

Whether you're single or have a family, one of your biggest expenses is probably health insurance. Hey, you're not alone. Health insurance costs seem to increase every year for most of us. According to US News, families paid an average of almost $3,300 for coverage in 2007.

Think that high cost gives you an excuse not to have health insurance? Think again! Unpaid medical bills are one of the biggest causes of bankruptcy. Not having health insurance isn't an option.

But here's how you can save money: consider switching to a Health Savings Account (HSA).

HSAs are great for people who don't go to the doctor often. If you're young, healthy, or have grown kids, then an HSA can be an excellent alternative to the usual, expensive health insurance plans of PPOs and HMOs. A typical HSA can save you hundreds of dollars a month while still providing you with quality health coverage.

How Much Can I Save?

Well, that depends on you and your needs. Here's how much one listener saved:

I just wanted to thank you for saving my daughter thousands of dollars on health insurance. Your Endorsed Local Provider [ELP] set her up with an HSA. She's saving $350 a month on premiums for a family of four!
—Bonnie in Florida

With the money you'll save, you can pay off any debts or invest that amount toward your retirement.

Getting Started With an HSA

Many companies now offer HSA plans along with their traditional plans. If you're company doesn't, then talk with a health insurance ELP about setting up a private HSA for you or your family. Often times a private HSA can save you more than your company HSA.

Just remember that your individual health needs and the area in which you live can drastically affect your options. Before you make any change to your insurance coverage, it's best to get the advice of a health insurance ELP.

Is an HSA a good option for you? Ask one of Dave's health insurance ELPs.

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Post a Comment

HSA is a great plan for people who are healthy. I unfortunately have two chronic illnesses, which require monthly medications, physician visits every three months, lab work, periodic MRIs. That's when I'm in remission or healthy. If I'm "sick" it is very expensive. My employer only has HSA coverage. It costs me a lot. For those of us who are not blessed with good health, it is costly.
ML in Ohio December 03 2009 8:05 AM

I don't see where anyone mentioned that the contributions you make to a Health Savings Account are deductible in determining Adjusted Gross Income.
Kelly Conway December 02 2009 2:10 PM

HSAs (with high deductible healthcare plan) can save money but the paperwork is kind of a headache compared to a traditional PPO. Instead of paying $15 for a Dr. visit--we paid "20% of the allowable charge" (after we had met our $3,000 deductible). We'd get a bill for an odd amount of like $12.48 for Dr. visit for which I'd have to write a check off my HSA, mail it, save a copy of the check and bill. You are supposed to document all your withdrawls from the HSA. It only saved our family $120 a month over the PPO option. By the time we fulfilled our high deductible--I think we were better off with PPO because we have high healthcare cost. If it were a larger cost difference--it would be worth it for sure.
Angela Cutter November 14 2009 2:55 PM

We as an employer are checking into a different group insurance plan for a very small company. Is HSA a possibility for us to offer?
Amy November 10 2009 12:51 PM

My employeer offers an HSA coupled with a high deductible BC/BS plan; this is the best deal I've had since the Army! $25 per week for family coverage, $5850 deductible and 80/20 after that. The best part is the business contributes $4000 to a prepaid debit card that we use for the deductible! The balance we can use payroll deduction on a pretax basis. End of year balance rolls over with no tax implication until retirement. Great idea made better by a generous employer.
Terry Lewis November 02 2009 11:55 PM

Years ago, I had insurance with my company. unfortunately, they were headquartered in Maryland, and we were in Pennsylvania. Well, the geniuses responsible for the health insurance coverage did not have a rider on the policy for out of state employees. Therefore, we were paying what amounted to self-employment rates for our monthly premiums. I was paying over $734/month!! I had enough. I searched around, and found out about the HSA. I found an insurance company that would insure individuals, and I have not looked back. My monthly premiums have dropped over $600 a month! you really can find much better, and less expensive health insurance. Just seek, and you will find!!
Eric C. Mirarchi November 01 2009 11:55 AM

My husband's work uses a HSA. It is WONDERFUL. Our responsibility for health insurance premiums is only about $65 per pay period (twice/month) for a family plan. His work puts $1000/yr into our HSA and we fund the rest, up to a total of $3000. This money we put into our HSA is ours FOREVER. It earns interest. It is to be spent on healthcare (including insurance premiums -- which we plan to use when we retire to help supplement medicare preimums -- if medicare is still around then). We are responsible for the first $3000/year out of pocket for any health care (ie. Dr. office visits, hospital costs, prescriptions, tests/procedures). If we spend over $3000/year, then we are covered 100% by our insurance company. We do get one free yearly physcial and the recommended procedures/tests for our ages completely covered each year and the children get the recommended vaccines completely covered. We receive discounts for using provider approved doctors and hospitals (which in our area is just about all of them). If we don't use this $3000 it is OUR money and continues to grow. We have decided to continue funding this account up to the limit each year for the time being so we currently have over $3000 in it. I think this plan is the BEST. It encourages us to take care of ourselves, pays for the things that would "break the bank", and allows us see what the "real" cost of running to the doctor costs. Most people have no idea what a doctors visit costs because they only pay a $20 or $30 co-pay. But just going to the doctor because you have a cold can have a "real" cost of $150+-- if the doctor orders a throat culture or viral culture there is added lab test costs. People need to learn more about the "real" cost of running to the doctor for things the doctor can do nothing about. That would also help decrease the demand for medical care so more people could actually get in to see a doctor. We all need to be much more responsible for ourselves and stop thinking "someone else" will pay for us!!!
Patti Lanzer October 31 2009 11:24 AM