April 10, 2009, Newsletter Issue #174: Lowering Family Health Insurance Costs

Tip of the Week

Whether you have group or individual family health insurance, there are a few concrete steps you can take to lower your costs when receiving family health insurance. Given the diverse health needs of families, from pediatric care to routine tests for mom and dad such as mammograms and colonoscopies, flexibility is the key to reducing your costs.

Generally speaking, a health maintenance organization will have the lowest premiums. In exchange for the savings, you have a number of forms to fill out and reduced flexibility in your medical services. On the other end of the spectrum, an indemnity or fee-for-service plan offers the most expansive service coverage and allows complete flexibility in choosing caregivers, services, and frequency of service.

As you might expect, the premiums are almost untouchable for the average family. A good middle ground for families would be to subscribe to a preferred provider organization (PPO). With a PPO, you have the flexibility to decide when, where, and how often to receive services. The plan is structured to give you an incentive, such as lower co-pays, to use providers that are part of the insurer's network of approved providers. If you avoid emergency room visits for minor problems and stick with in-network providers, you will have the lowest out-of-pocket expenses. As far as the premiums for PPOs go, they generally fall somewhere in the mid-range between those for HMOs and fee-for-service plans. You can further reduce your health care costs by opting for a higher deductible, which will lower your premiums.

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