Everything seems to cost more nowadays, and health insurance is no exception. Chances are you’re paying more for gas, for groceries, and for health care – and the trend is set to continue. While the Affordable Care Act has slowed down price increases in premiums in recent years – and the general cost of healthcare has also flattened out – the amount you pay for health care expense (the deductible) has steadily increased. Why has this happened? And what can you do in 2016 to manage your higher health insurance bills?
Why Are You Paying More for Health Insurance?
It’s a fact – healthcare costs are rising . One of the biggest problems the healthcare industry faces is a rising cost of expensive, often specialty drugs. Costs are shifting to take this burden away from the insurers and onto the insured. Different drugs on the market now for cancer, arthritis, and heart disease are vastly more expensive than before. And with the aging population, we are spending more on healthcare overall.
What you can do about it depends on where you get your health insurance in the first place:
Health Insurance from Employer
If you are one of the 50 percent of Americans insured through your employer, chances are you’ve noticed it’s not such a great deal anymore. While it is always a bonus to get good quality insurance through your job, that doesn’t mean it is automatically cheap – or an excellent deal. Over the past few years employer-based healthcare schemes have been slow-growing. Employers tend to be increasingly shifting costs to employees – this is known as cost sharing and it is not necessarily a good thing for you when you get your insurance through your work.
The Kaiser Family Foundations says that the average deductible more than doubled from 2006 to 2014 – from $584 to $1,217. And there’s been a rise in the number of workplaces schemes that only offer high deductible plans. If you are seeing larger deductibles or premiums every year, there are a few things you can do.
1. If you are stung by higher premiums, look for a high-deductible plan. You’ll pay less each month but you need to realize that if you get ill, you’ll pay more out of your pocket before the insurance kicks in.
2. If you don’t like the idea of the large deductible, choose a plan with a higher premium. This will be something like a PPO where you have a wider choice of doctors and don’t have to worry about a large bill if you get sick.
3. Sign up for a health spending account where you can set aside pre-tax income for the expenses you pay out of pocket for treatment. In this way you can minimize the problem of a high deductible while keeping your premiums under control.
Marketplace Health Insurance
If you are enrolled in a healthcare insurance plan from the marketplace there are things you can do to combat rising healthcare costs. The main thing to remember is that you can shop around.
1. Are you getting the maximum allowable benefit? Update your income and reapply for health care subsidies or the premium tax credit. It may be that you can claim for more money off your insurance by making sure your details are up to date and accurate.
2. Check your plan carefully. What was once great value may now have shifted as the marketplace changes. It pays to look at what else is on offer and switch plans wisely to avoid the increasing cost of insurance.
3. Do you have children? Make sure you apply for CHIP coverage, or Medicaid. These schemes are designed to help families with children and you may be eligible even if your income is above average.
But don’t panic if you have been reading reports about double-figure rises – in reality, most of the plans will not increase by this amount, and you will probably see a much slower rate increase with marketplace plans that you may have been expecting. Plus, with marketplace plans the increase in premiums will often be minimized by increased subsidies. Take a little time to look at what your plan offers now, and what you are paying in relation to the market. You have the freedom to move – and the opportunity to save money in 2016.