If you’re anything like me, you’re fed up with high health insurance costs.
Every year, I get the dreaded letter in the mail from my insurance company saying how they appreciate my business, but rates are going up 10% again this year. Usually it’s an increase of $70 or $80 per month, since we have a family plan.
The truth is that my insurance company isn’t necessarily “ripping me off,” though it feels like they are sometimes. They aren’t the only company raising rates each year. All health insurance companies are. They have to in order to keep up with medical inflation, and be able to cover my “possible” future medical expenses.
Why is My Health Insurance Premium Increasing?
Because the cost of hospital stays, medical equipment, and other medical services is rising, the insurance companies raise their insurance prices and cut their benefits each year to keep insurance premiums somewhat affordable.
I know one thing for sure; my family can’t keep up with price increases on our family plan for long. So, what are your options if you don’t want to, or can’t afford to, pay for expensive comprehensive health insurance coverage anymore?
Other than going completely uninsured, which isn’t an option for most people, catastrophic health plans have been the most popular solution for keeping major medical protection and significantly lower insurance premiums.
What is Catastrophic Health Insurance?
Catastrophic plans are health insurance plans that are primarily meant to cover major medical expenses, after you’ve paid a large portion of your own medical bills out of your own pocket. These plans don’t cover your everyday expenses, like office visits or prescriptions, until after you’ve met your deductible. This is why they are so affordable, compared to traditional health plans.
Am I a Good Candidate for Catastrophic Health Insurance?
People who can benefit the most from these plans are people who don’t have chronic health conditions, expensive medications, and are relatively healthy. If you have chronic conditions and require constant medical care, this is not the right solution for you.
If you don’t have chronic conditions, and are in relatively good health, you may be able to pocket hundreds of dollars per month by switching to a catastrophic plan.
For me, the idea of paying my insurance company $800 per month, whether I needed medical care or not, gets under my skin. With catastrophic health insurance plans, you keep the extra savings, and only spend it if you need medical care during the year.
Of course, having catastrophic protection still protects you from having to pay hefty medical bills. It’s a win-win solution for you and your insurance company.
Health Savings Accounts Save You Even More
Depending on the type of catastrophic coverage you buy, you may be eligible to open a health savings account (HSA). HSA’s allow you to pay for many of your medical, dental, and vision expenses with pre-tax dollars. If you’re interested in tax benefits, be sure to specifically look into “qualified high deductible health plans.”
Affordable premiums are a huge benefit of catastrophic health insurance, but the tax benefits make this solution unbeatable.
One Last Money-Saving Thought
Another benefit of this solution is the lower rate increases you will receive because you are on a lower-cost plan. For instance, if your current plan costs $800 per month, a 10% rate increase means another $80.00 per month for the next year. However, if your premium is only $400 per month, 10% only equates to $40.00 per month. My point is, your insurance premiums will increase less, and compound slower, because your premium is lower to begin with.
Until the cost of healthcare is controlled, health insurance prices will continue to rise. However many of us can manage them by keeping coverage for the big stuff, but covering our everyday expenses ourselves.