Are you ready for the Health Care Crisis? Part 1 – The Plan

Thursday, April 23rd, 2009 by Charles Mayfield, CFP®


The problems continue to mount for our health care system in the US.  What can you do about it?  Your options may not be as limited as you think.  There are a number of things you can do as an insured to curb costs.  Let’s spend some time today discussing how to make wise decisions on your plan design.  Whether your choice is between two plan options sponsored by your employer or the endless offerings put forth by individual carriers, there are certainly some general guidelines to follow.


Things to consider about the plan design that can impact the premium:


  • - Co-pays:  – $10 & $20 co-pays are too rich a benefit and cost a ton
    • o Any of the following could reduce your premium substantially
      • Consider $40 or $50
      • Many plans offer you the ability to limit the number of co-pays per calendar year (usually 4 or 6)
        • Once met, the deductible applies
      •  Consider removing co-pays altogether with an H.S.A plan
  • - Deductibles: it seems so obvious, but I needed to say it
    •  The higher your deductible, the lower your premium
    • Be careful not to go too high.
      • You need to be able to afford the catastrophe
  • - Co-Insurance: What you pay once the deductible is met
    • Represented as a percentage (100%, 90/10, 80/20, 70/30)
      • The more you pay (70/30), the lower your premium
    • Must consider deductible when choosing your coinsurance
  • - Drug Benefits: premiums are certainly tied to prescriptions
    • Are you carrying a prescription deductible?
      • Even a $100 or $200 deductible helps
    • Know your formulary
      • What counts as generic?
      • Are my brand drugs covered?
    • Raise your Co-pays



Take a moment and really think about what benefits are most important to you.  Whether you’re a self employed person, business owner or employee trying to choose the right plan for you; these factors will ultimately impact your premium.

If you take away one thought from this article, let it be this: “Once you have paid a premium dollar to the insurance company, it’s GONE!  Reducing premiums can ultimately lead to substantial savings if you stay healthy.”

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