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7 tips to pay less for health insurance

Health insurance policies -- and their premiums -- vary widely. But you have more control over your costs and coverage than you might think.

By Stacy Johnson Mar 26, 2012 5:26PM

This post comes from Brandon Ballenger at partner site Money Talks News.

Money Talks News on MSN MoneyLast week was the second anniversary of the Patient Protection and Affordable Care Act -- "health care reform" to its supporters, "Obamacare" to detractors. This week, the U.S. Supreme Court is hearing legal arguments about the law and may strike none, part, or all of it.

That makes this a good time to give your health insurance a checkup. If the cost of your coverage is entirely borne by your employer, you should still understand your policy. And if you cover the cost yourself, you're already aware of the bite it takes our of your budget. Learning what you're paying for and how it works allows you to make decisions that can lower the cost. In the video below, Stacy Johnson offers some tips on shopping for health insurance. Check it out, then read on for more details.

As you heard in the video, prices for insurance can vary widely. Fortunately, you have some control. Here are the key factors you need to know to manage the cost of your coverage:

Deductible. This is your out-of-pocket expense before your insurance kicks in. As with car insurance, the higher your deductible, the lower your rate. If you have few regular medical expenses and are in good health, choosing a plan with a higher deductible may be a good option.

Image: Insurance Money (© Comstock Images/Jupiterimages)On the other hand, if you can't afford to cover a big deductible, you might not seek the care you need if you get sick. That can lead to bigger problems -- medical and financial -- down the road. You can learn more about the pros and cons of high-deductible plans, and the health savings accounts they're often paired with, in "Is high-deductible health insurance healthy?"

Network. Networks are created by agreements between the insurer and care providers. Doctors and facilities that are "in-network" (partnered with your insurer) will cost less than those outside the network. This makes it important to find a plan that includes care from people and places you trust in your area. Just because a network sounds large doesn't mean it includes the doctors and specialists who matter most to you.

Discounts. In "Health care reform = free preventive care? Not exactly," Stacy explained how his supposedly free physical resulted in a bill for more than $730. Fortunately, his insurance carrier had negotiated discounts with the doctor that reduced his out-of-pocket expenses to about $100.

When comparing plans, compare negotiated rates for common expenses like office visits and lab work. (And know what preventive services are covered under the law, so you don't have to go through what Stacy did.) Some plans may also offer discounts for things that help you get healthy, like weight loss or quit-smoking programs.

How can you compare negotiated rates? Ask your doctor. For example, if your doctor accepts insurance from multiple carriers, ask which one has the lowest negotiated rates for common procedures.  

The higher your deductible, the more important it is to find the lowest negotiated rates.

Co-pays and stop loss. Co-pays and co-insurance are expenses you share with the insurer. So if you have an 80/20 co-pay, your insurer covers 80% of the tab and you pick up 20%. When the total amount you've paid meets your stop loss, your insurer picks up the entire bill. The higher the stop loss, also called an out-of-pocket maximum, the lower the rate will be.

Exclusions. "Covered expenses" is a key phrase. Your insurance coverage only applies to what the insurer decides it does. Nobody knows what disease they may face later in life, but it could be disastrous to pay your insurance premium for years only to find out your expensive illness isn't covered. Policies with more exclusions may be cheaper, but they might not be worth it. Make sure you understand what's included (and excluded) from your coverage.

Quality. Smaller, lesser-known insurers might charge lower rates, but it's important to check out their financial health. Aim for companies that are rated at least "A" by A.M. Best (where A++ is the best possible) or Standard and Poor's (where AAA is best). It's a good idea to stick with companies you can count on in the long run.

Length. A few years ago, Stacy found that his insurer of seven years was offering new customers a policy exactly like his for half the price. When he called to find out why, they couldn't provide a reasonable explanation. As you might imagine, Stacy is no longer a customer.

As you shop, don't forget the golden rule for health insurance, as well as any other kind you might consider: Make sure your new policy is in effect before you drop an old one.  Never, ever be uninsured, even for a day.

More on Money Talks News and MSN Money:

Apr 8, 2013 3:09PM
7 tips to pay less for health insurance- MSN Money : Try this site where you can comapre quotes from different companies:
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