Keeping Your Health Insurance Premiums Low
By Wiley P. Long
Health Savings Accounts (HSAs) offer tax deductions for medical expenses, and the
opportunity to set up an additional retirement account. But regardless of any other
positive benefit of HSAs, lower premiums are the primary reason that thousands of
Americans have chosen Health Savings Accounts as the best way to protect their family's
health and assets. Here are some key suggestions on how to keep your health insurance
1. Choose an HSA-qualified plan for lower rate increases. Average
group health insurance premiums rose by 9.6% last year and rose over 10% for each
of the previous six years. Individual plans went up even more. Yet it is expected
most HSA plans will experience much lower rate increases. A very large study was
recently published showing that rate increases over the past year for consumer-driven
plans such as HSA plans was only 3.4%. Blue Cross of Minnesota has reported that
its HSA customers spent 8% less than their traditional insurance clients. Humana
has reported claims' costs of 4.9% for consumer-driven plans, versus a 19.2% increase
in claims for other plans. In fact, average HSA premiums for individuals have actually
dropped 19.5% over the last two years.
The reason these plans have lower rate increases is that people who have HSA-qualifying
high-deductible health plans are likely to pay closer attention to costs, and take
better care of their health. For instance, an HSA owner offered a statin drug to
lower her cholesterol may be more likely to request a generic version, or ask her
doctor if inexpensive nutritional supplements such as niacin or fish oil may be
a solution. These actions save the insurance company money and should result in
lower rate increases.
2. Raise your deductible as your HSA account grows. When you fund
your account you build up a financial "cushion" which allows you to raise your deductible
as your account grows. Every time you raise your deductible, your premium should
By the way, don't forget that every time you fund your account you get an instant
tax-deduction. When you offset the tax savings against your premiums, you'll find
your net cost for an HSA plan can be very low.
The maximum allowable contribution goes up every year with the rise of the Consumer
Price Index. Currently, the individual contribution limit is $2,700, and the family
limit is $5,450. So each year you can deposit greater amounts into your HSA and
continue to raise your deductible, if you choose.
3. Stay healthy, so you can switch plans. All health insurance
plans have rate increases, and we’ve even seen premiums jump on some HSA plans.
If a rate increase happens to you, you can switch to a different insurance company
– but only if you pass their underwriting requirements. If chronic disease develops,
you may be stuck with your current plan, and its accompanying rate increases, for
eternity. Or at least it may seem that long…
If you pay attention to the pharmaceutical commercials, you learn lifestyle really
has nothing to do with disease, and it is natural and healthy to be on many medications
for the rest of your life, which will then solve your health problems.
If you pay attention to the science, you know the truth is quite different. It appears
lifestyle is probably 95% of the picture, and we know the occurrence of degenerative
disease can be dramatically reduced and even prevented.
Fortunately, most Health Savings Account owners are interested in health, wellness,
and disease prevention. After all, they’re paying for their own doctor visits if
they do get sick. HSA owners are also "forward thinking" people, and like to plan
for their future – both financial and physical. You can improve your odds of excellent
health with just a few key habits:
4. Compare your plan to other available plans at least once a year, or whenever
you get a rate increase. Often-times people keep their plan much longer
than they should, and end up paying too much. If your rates go up, you should compare
a wide variety of plans to determine if you are in the right plan for your needs
and budget. By using these four strategies, the typical family can save thousands
of dollars in health insurance premiums and still protect themselves against unexpected
major medical expenses.
- Eat very high quantities of fresh vegetables and fruits. Shoot for 35% of your calories.
This will lower your risk for diabetes, high blood pressure, heart disease, cancer,
and much more.
- Limit your intake of sugar and starchy carbohydrates like bread and pasta. The majority
of health problems in the U.S. are related to metabolic diseases that involve insulin
- Exercise and lift weights. Exercise guru Jack La Lanne turns 93 on September 26,
and he says if you have muscles you never feel old.
Wiley P. Long is the President of HSA for America, an
independent health insurance firm specializing in Health Savings Plans that works
with a HEalth Savings Account.