Can You Avoid Paying Hefty Insurance Premiums?
If you think the healthcare bill’s figure is going through the roof, then here’s a reality check! At a national average of $20,000, your insurance premiums are not any cheaper. In 2020, the premiums went up by 5%, much higher than what the industry expected.
The National Association of Insurance Commissioners has reported that the segment is growing at a phenomenal rate. Profit margins were as high as 3.3% in 2018—a 0.9% jump as compared to the previous year. While the numbers are not yet out for 2019, major players in the industry are expecting the record-breaking streak to continue.
Why Are the Premiums Costs Rising Steeply?
r.classen/Shutterstock: Analysing the factors behind continuously rising premium costs
Many academics got into action to find out the reason behind this situation. Melissa Thomasson, an economics professor at Miami University, points out two principal causes for this—surprise billing and healthcare consolidation.
- Surprise Billing
We are often left with a surprisingly hefty bill in our hands for a minor procedure or a routine checkup. Such out-of-the-blue costs have led to an uptick in the subscription of more comprehensive policies.
- Healthcare Consolidation
wavebreakmedia/Shutterstock: Healthcare consolidation is one of the reasons leading to increased premium costs
Economics 101 teaches us that prices increase when there is lesser competition in the market. As hospitals and clinical-care providers merge, we see lesser discounts on the monthly premium costs.
How Do You Deal with This?
GaudiLab/Shutterstock: Finding options that can help you escape the trouble
There are a few strategies that can help you save some money on your premium.
- Tweak Your Health Plan from Time to Time
Talk to insurance providers regarding alternatives for traditional plans. Based on your risk appetite and well-being, you can opt for a policy with higher deductibles and a lower premium.
- Get A Health Savings Account (HSA)
If your healthcare plan has higher deductibles, then you might qualify for a health savings account. It is a unique offering wherein the account holder gets to decide the amount that will go into a corpus meant for medical needs. In case the HSA fund is not used, then the sum gets carried over to the next year.
- Consider Getting a Short-Term Insurance Plan
It is a wise bet for those who are looking only for coverage only during catastrophic scenarios. Be wary since this plan does not cover any pre-existing conditions.
- Maintain A Healthy Lifestyle
This one is a no brainer! Ensure that you are getting a balanced diet and steer clear of all addictive habits. Getting regular medical checkups done is an essential part of your healthcare journey.
In this day and age of rising costs, we should keep a tab on our finances and insurance scheme to secure ourselves in case of adversities. While paying premiums cannot be avoided, we can surely be wise about choosing our policy.
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