If you’re a small business owner or are self-employed, you’re vulnerable to dramatically rising health insurance premiums, which often go up by more than 10 percent each year. Health reform has the potential to create a more level playing field for small business owners and others buying insurance on the individual market, but most policy changes won’t go into effect until 2014. Until then, what can you do to make health insurance affordable for yourself and your employees?
Consider a high-deductible plan. If your premium rates are out of control, consider switching to a plan with lower premiums and a higher out-of-pocket deductible. This means that, with the exception of preventative care, you’ll be footing the bill for all health care procedures up to a certain limit, which may be as high as $10,000 or $15,000 per individual. Nonetheless, it’s far better than no insurance at all: You’ll receive your insurer’s contract rate for services, which is often half of what you’d pay without insurance, and in the event of a major medical expense, you won’t risk going into severe debt. Many plans also allow you to put a certain amount of money into a tax-free health savings account (HSA) to use towards your deductible. Just be sure that, if the worst case were to happen, you would be able to liquidate enough assets to pay your full deductible amount.
Join a union or association for group coverage. Many local chambers of commerce provide members with group health insurance coverage options, which may be more affordable and provide more choices than those available on the individual market. A number of industry-specific associations and unions also offer group insurance rates for their members, so ask the membership groups in your field about available options.
Use an insurance broker. A broker will help you research available plans and find the best one for your business’ needs. Because brokers make commissions from the agencies they work with, they provide their services free to consumers. If you’re having trouble understanding the differences between various health insurance plan options, your broker will take the time to explain how the plan works and help you feel more comfortable making your decision. He or she will also serve as your advocate if you run into problems with your policy. Check out this New York Times article for details on what to look for in a broker.
If you’ll be paying anything out of pocket, research rates for medical services in advance. The Healthcare Blue Book provides a comprehensive listing of fair prices for various medical services, according to region. Your insurance provider may also offer an online database of contracted rates for services through their website. If you need to have an expensive procedure done, call medical facilities in your area to find out how their prices compare before booking your appointment. After you receive your bill, look over it closely to ensure that you haven’t been overcharged. (Also note that listed prices typically do not include lab fees, which could add hundreds to your overall bill.)
Negotiate prices for medical procedures. If you have a high-deductible plan — or have no insurance at all — you may be able to cut your medical bills significantly by pre-arranging payment for expected procedures like a colonoscopy or maternity care and delivery. Doctors and hospitals don’t like the hassle of dealing with insurance plans, and they’re often willing to offer discounted rates to patients who’ll agree to pay for services up-front: Speak with someone in the billing department before booking an appointment to see if the hospital is open to negotiating. If the medical treatment is unexpected, you may still be able to receive discounted services by asking the doctor directly about how you can save money.
Have any other tips for saving money on healthcare costs? Share them in the comments!