How to Reduce the Cost of Health Insurance

Ways to save money on health insurance

In today’s day and age, one cannot overemphasize on the significance of health insurance policies. They are primarily designed to cover an individual financially in case of a medical emergency caused by illness, accidents and hospitalizations. Thus, health insurance is not simply a safety net that protects your health but also a safeguard for your financial future. Despite the paramount importance of health insurance, not every citizen is able to afford it.

Health insurance premiums, deductibles and copays have steadily increased over the past decade, thereby making hospital visits and medications much more expensive, even for those with employer-sponsored health insurance. For instance, according to the Healthcare Value Index and Affordability Index from West Health-Gallup, about 112 million Americans are struggling to pay for health care and the proportion of people skipping health care due to cost had tripled from 2021 to 2022.

But, not all hope is lost, as there are ways to cut back on your healthcare costs without giving up on your insurance coverage. Interested to know more? Read ahead!


Top 10 Ways to Save Money on Health Insurance: An Updated Guide

  1. Do Not Focus Excessively on Monthly Premiums

To the untrained eye, it might seem obvious that one is saving on money if their monthly health insurance premiums are low, but this is not always the case. Experts say that when comparing health insurance plans, the most frequent error consumers do is to pay too much attention to the monthly premiums and ignore the out-of-pocket costs associated with receiving medical treatment.

Read Also: Is Critical Illness Insurance Necessary?

In other words, cheap plans are not always the most affordable in the long run, as they come with higher annual copays, deductibles, or coinsurance.

Health insurance plans with a lesser monthly premium might be a suitable option for younger and healthier people who do not use prescription drugs or have to rarely visit the doctor. But, if you have a chronic medical condition, depend on prescription drugs or see the doctor regularly, then focusing on higher deductibles may be more advantageous than opting for policies with lower monthly premiums.

  1. Apply a Tax Credit Premium

An advanced premium tax credit may be available to you if you buy a medical insurance plan via the APTC or Health Insurance Marketplace. Your insurance premium is reduced by this credit according to your family size and income. The average projected monthly APTC in 2022 was USD 508. Each year, you have to reapply to get a premium tax credit. The premium tax credit may alter if your family size or income fluctuates. 

  1. Remain in Your Network

Remaining in the provider network of your health insurance plan is the third strategy to reduce your premiums. If a medical provider that does not have a negotiated fee agreement with your health insurance provider treats you, you might end up paying for your treatment out of pocket.

Also read: What To know About Short-Term Health Insurance?

Coverage levels can vary among different plans, but some plans do not provide meaningful coverage outside of your provider network, at least for non-emergency care.

  1. Apply for Medicaid or CHIP

 CHIP or the Children’s Health Insurance Program or Medicaid may be able to provide low-cost or free health insurance to certain low-income people and families.  Medicaid/CHIP eligibility rules vary from state to state, although they are generally based on family size and income.

  1. Negotiate Bills

If you have out-of-pocket expenses for a hospital or doctor’s visit that you think are excessive, then it might be a good idea to try and negotiate your bill. So, you start by researching the average cost in your state of the medical procedure you received, and then inquire with the billing department of your hospital or doctor to see if the price might be lowered. If not, inquire about payment plans or financial healthcare aid programs.

  1. Avoid Unnecessary Emergency Room Visits

The sixth way to save money on health insurance is to avoid unnecessary emergency room visits. For instance, if your child is showing signs of an ear infection on the weekend or has hurt their ankle while playing, a trip to the emergency room may seem like the ideal solution. After all, when your doctor’s office is closed, you need medical care one way or the other.

But, experts suggest that most people will save money by visiting an urgent care clinic that is in your provider network, rather than visiting the emergency room. Besides paying significantly less at an urgent care clinic, you can also dramatically reduce your time spent receiving the treatment. So, the ideal way is to get acquainted with the urgent care clinics and hospital emergency rooms that are in-network before the time comes when you need them promptly.

  1. Itemize Your Tax Deductions

You may deduct family or individual health insurance medical expenditures, including premiums, when you file your taxes by selecting itemized deductions. That being said, you may only write off medical costs that exceed 7.5 percent of your AGI.

  1. Purchase a Catastrophic Plan

If you want lower monthly payments, consider catastrophic health insurance. Catastrophic health plans are available to individuals under 30 or individuals above 30 who qualify for a hardship or affordability exemption. These plans offer very large deductibles in addition to very cheap premiums. For example, a catastrophic plan’s yearly deductible is USD 18200 for a family and USD 9100 for an individual.

  1. Get an HSA

The ninth way to save money on health insurance plans is to get a HSA or v Health Savings Account. It can save you money on qualified health bills. HSAs are exclusively available to Health Insurance Marketplace HDHP buyers. HSA funds may be used to cover your coinsurance, deductible,  copayments, and other qualified medical expenditures, but they cannot be used to cover your health insurance premiums. 

  1. Shop Around

Last but not least, health insurance costs vary by employer, so search around and compare policies.



So, there we have it, a crisp overview of the top 10 ways to save money on health insurance.