Health Insurance
Options Help Tight Family Budgets
By Theresa Green
Rising gas prices,
higher home prices and increasing costs overall have many
Oklahoma families feeling the economic pinch. A lot of families
have begun to re-evaluate their expenses in hopes of trimming
the family budget. Insurance experts say many may not think to
evaluate their health insurance coverage, but probably should.
“In many instances,
there are ways to save some money while still ensuring you get
the coverage you desire for yourself and your family,” said
long-time Oklahoma insurance specialist John Krogh of AASK
Insurance.
Krogh pointed out that
many employees find themselves bracing each fall for the next
round of changes in their company’s health insurance plan. The
Kaiser Family Foundation reports the cost of family coverage
rose 59 percent between 2000 and 2004. Although the cost
increase dropped to 9.5 percent in 2005, it is still increasing
three times faster than worker’s wages.
Oklahomans who are
insured through an employer’s group health insurance plan may
opt to add their spouses and children to that plan as well.
Although, Krogh said sometimes they do so without considering
other options, paying for it each month often as a deduction
from their paycheck. Yet, it may not be the most cost-effective
plan for the family.
In fact, Krogh said
there are often substantial savings involved when spouses and
children move from an employer’s group insurance plan onto their
own individual plan.
“Jaime
has great
insurance provided through her job,” said Krogh. “She paid $260
each month to have her two-year-old son covered under that same
plan. But we found that she could buy comparable insurance for
her son through in individual policy at a cost of only $97 a
month. That’s a significant help to the family budget each month
and an annual savings of more than $1,950.
”Krogh pointed out
that another way to help save some money each month on your
out-of-pocket insurance costs is to consider choosing a
higher deductible. The deductible is the amount of
money you agree to pay each year toward your individual or
family health care costs. It is in addition to the premiums
you pay each month. In other words, the premium is the
amount you pay to have insurance, but you will also still
pay for health care services until you reach your
deductible
“When
evaluating deductibles, our goal is to help you select the right
deductible for you and your family,” Krogh explained.
“Oftentimes, families see substantial savings just by
choosing a higher deductible.” |
|
It Pays to Shop!
Real Life Esamples of Insurance cost
savings |
Jaime
School Teacher, Hooker, Oklahoma
2-year-year-old Son's Insurance Coverage
|
Per Month |
Per year |
| Employer's Plan |
$260.00 |
$3120.00 |
| Individual Plan
|
$ 97.11 |
$1265.32 |
| Savings |
$162.89 |
$1265.32 |
|
David
Yukon, Oklahoma
Insuring Self and 2 children
|
Per Month |
Per Year |
| $500
Deductible |
$463.07 |
$5556.84 |
| $2,500
Deductible |
$224.19 |
$2690.28 |
| Savings |
$238.88 |
$2866.56 |
|
Jason
Piedmont Oklahoma
Insuring Self |
|
Per Month |
Per Year |
|
Wife's Group Plan |
$358.78 |
$4305.36 |
|
Health Savings Account |
$ 77.87 |
$ 934.44 |
|
Savings |
$280.91 |
$3370.92 |
|
|
|
He said that was just what happened
with
David, an Oklahoma
father of two.
According to Krogh, David opted for a plan that included a
$2,500 yearly deductible and a $224.19 monthly premium.
“Had he gone with a $500 deductible
plan for his family, he would have paid $463.07 a month,” Krogh
said. “So his monthly savings just by selecting a higher
deductible are about $238 a month or $2866 less per year. In
other words, he saves more than his deductible in just one year.
That’s significant.
”Another
money-saving insurance option families might want to consider is
a
Health Savings
Account or HSA.
Krogh said these plans feature high deductibles and also give
the insured the chance to put money into a special savings
account each month. Those funds can then be used to pay for a
variety of health-related services. The money deposited into
the HSA is also tax-deductible.
“Health
Savings Accounts are really growing increasingly popular,
especially with the self-employed,” he added. “Many like the
idea of being able to set up a savings account that can be used
for medical, dental, vision and other health-related expenses
throughout the year. They also enjoy the tax benefit that the
account provides. Plus the money, if not used, rolls over from
year to year. At age 65, you can begin drawing the money out as
supplemental retirement savings.”
The
HSA was just the ticket for
Jason, Krogh’s son-in-law.
Jason could have been covered under
his wife’s group plan at work. Adding him to the plan would
have cost the couple about $359 a month. Instead, Wood opted
for an HSA. It carries a monthly premium of just under $78 a
month. After he meets his $2600 deductible, his plan pays 100%
of his allowed medical expenses.
“There are a lot of options,” said
Krogh. “I think the bottom line for families is that while many
increased expenses are outside of their control, health
insurance is an area where you do have options and those options
may bring overall savings. A good health insurance agent can
help you research your options and find the right plan for
you.”
To
learn more about health insurance options and which may be right
for you, visit
www.AASKinsurance.com
.
