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January 19, 2008

Insider Tips for Californians to Lower Health Insurance Premiums

Pick PPO

If you are covered by an HMO policy, immediately change your coverage to a PPO plan.

In California, HMO plans are substantially more expensive than PPO plans. With an HMO plan you may or may not have a deductible, but you will still make co-payments for office visits and other preventive services. With a PPO plan you, not the HMO, can select your doctor. I recommend changing to a PPO plan to save an average of 40 to 80 percent.

Increase Your Deductible

The cost of medical services in California has made your deductible nothing more than a down payment on your real financial exposure - your annual maximum out of pocket cost or expense. As an example, if you or a family member were to go to the hospital as an outpatient for a series of medical tests, the cost would range from $15,000 to $25,000, even though you were classified as an outpatient. In this example, no matter the size of your deductible, you would pay the annual out of pocket cost maximum, making the size of the deductible financially meaningless. I recommend that you increase your low deductible policy to one with a deductible at or near your annual maximum out of pocket cost, and save from 60 to 80 percent.

Separate Family Policies into Individual Policies

By separating policies into individual plans you will be able to customize your overall insurance coverage to reflect your specific needs. As an example, men between the ages of 18 to 35 usually do not go to the doctor as often as women in the same years; therefore, an annual physical would probably be sufficient. In addition, young children visit the doctor more frequently than their parents and may need a plan with more complete well baby office and other benefits. By separating family policies into individual policies, you may be able save 20-50 percent.

Select a High Deductible Health Savings Account (HSA) Qualified Plan

The requirements in 2008 for an HSA qualified health insurance policy are that the minimum deductible is $1,100 for an individual, and $2,200 for a family. The annual maximum out-of-pocket cost is $5,600 individual, and $11,200 for a family. With this type of insurance coverage you pay for all of your medical expenses, with the exception of your annual physical and annual OB/GYN exam, up to the amount of your deductible. The real benefit to you is that once you achieve your annual deductible/maximum out of pocket costs, all future medical expenses will be paid by the insurance company. Doing this can save you up to 35 or even 50 percent.

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Posted by healthinsurance at January 19, 2008 08:35 PM