Is there anything more confusing than trying to pick out a health insurance plan? Between the acronyms that only make sense to the systems that create them and trying to find the balance between costs you pay now and what you might get stuck with later, health insurance plan comparisons can feel like walking through a maze — blindfolded.
If you need some help taking off the blindfold, then read on to learn how to find cheap health insurance, and how to find the balance between costs today and potentially larger costs tomorrow.
How to find cheap health insurance
The question of how to find cheap health insurance isn’t as straightforward as it seems. Sure, you can find a plan with inexpensive premiums, but your deductible might be through the roof. Or let’s say the deductible is within your realm of reasonable pricing, but the copays are higher than you’d prefer.
That’s why it’s so important to carefully consider all the costs involved when shopping for health insurance.
This sentiment is echoed by Policygenius founder and CEO Jennifer Fitzgerald, who said cost is the most important thing to consider when comparing plans, but that it comes in multiple forms:
Premiums: Paying rent on your health insurance
The most important cost upfront is the premium, that monthly fee you pay to maintain a health insurance plan. Typically, the higher the premium, the lower the other costs. Fitzgerald says a high-premium plan might make sense for your budget if you’re someone who regularly visits the doctor and takes prescription medications.
But if you’re healthy and rarely do more than an annual physical exam, you might be able to opt for a lower-cost monthly premium. Just make sure you realize that doing so could mean paying more for your prescriptions and copays, as well as having a higher deductible.
Deductibles: The wild card of health care costs
One of the best ways to keep your health insurance costs low is to choose a high-deductible plan with a low premium. However, this is also one of the best ways to wipe out your life savings if you end up needing to use a lot of medical services over the course of a year.
As you may know, you’ll have to pay out of pocket for most or all of your medical expenses until your deductible for the year is met — after that, your insurance will usually cover much of your remaining costs. So, if you have a low deductible, then you don’t have to pay much of your own money before your insurance kicks in.
However, if you have a high deductible and end up in the emergency room, you could feel like you’re paying everything out of your own wallet. If you’re willing to go high-deductible in order to save money on your monthly premium, make sure you’re prepared to pay the costs of your deductible should something happen.
Copays: Important but often forgotten
If you don’t go to the doctor often, then this cost is an easy one to disregard accidentally. However, anyone on a monthly prescription or with regular trips to see their physician or specialists needs to bear it in mind — those office visit and prescription copays can add up fast.
Like deductibles, you can usually save money on copays by opting for a higher-premium plan.
Network: The importance of making sure your doctors are covered
Have a favorite doctor or medical center? One way to incur major costs is to end up with a plan that considers such people and places “out of network.” Before selecting a plan, see if your doctors are covered — and if you’re not sure, you can call their office and ask.
That said, Fitzgerald warns that coverage can change anytime (even though you can’t necessarily change your health insurance plan if it does). So consider this in your comparison, but know that it’s not always set in stone.
Maximums: A limit for your out-of-pocket costs
As you consider how much various health insurance plans might cost you, Fitzgerald of Policygenius and Mom and Dad Money blogger and financial planner Matt Becker both note that there are maximums for out-of-pocket costs. As Becker explains:
“I like to compare the guaranteed cost, which is simply the total annual premium payment, and the maximum cost, which is the total annual premium payment plus the out-of-pocket max. Many times you’ll find that the maximum cost of high-deductible plans isn’t much more than the guaranteed cost of low-deductible plans.”
Of course, you’ll have to do your own price comparison to see if that rings true. As for current out-of-pocket maximum costs, Policygenius says for 2018 it will be, “$6,650 for individuals and $13,300 for families.” HealthCare.gov states the maximums for 2018 were “$7,350 for an individual plan and $14,700 for a family plan” for plans in its insurance Marketplace.
The cheapest plan might not be the one you think
As you can see, there’s more to a health insurance plan than the monthly cost of maintaining it. That’s why the plan that looks the cheapest can end up costing some people far more over time.
It’s important to think carefully about the services you might want to use so you can make sure this doesn’t happen to you. When you’re comparing plans, you’ll be able to see prices for all of the factors mentioned above. Find the plans you’re most interested in, and compare the price of each factor.
Then, walk yourself through the past year. How many times did you go to the doctor? How many different types of doctors did you see (including specialists for which you needed a referral)? Did you go to the hospital at all? How many prescription medicines did you take, and how often did you need to refill them?
Now map out each plan you’re reviewing using these data points. How much would each plan cost you this year if it were the same as last? Don’t forget to include anything you think that might change this year, including additional medical services you already know you might need, such as if you’re planning to have a child or have recently been diagnosed with an illness.
With this kind of mapping, you’ll have a fairly good idea of all the costs you might incur with various health insurance plans. Then you can find the one that’s cheapest for you for an entire year, not just each month.
Becker offers this way of thinking when comparing plans:
At its core, insurance is meant to protect you from worst-case scenarios. So, at the very least, you want to make sure you’re not picking a plan that caps your benefits or that excludes any conditions or services that could end up costing you in the long run.
Where to find cheap health insurance
Now that you’ve been armed with information to help you compare plans, let’s go beyond how to find cheap health insurance and discuss where to find it. Luckily, this part can be easier than it seems.
First of all, if your employer offers you health insurance, the various options will be presented to you by your HR department (or, if you work for a smaller company or an early-stage start-up, someone who’s responsible for this type of work). All you have to do is compare plans.
And although you’re not required to take your employer’s health insurance offering, doing so will usually mean big savings for you. According to data from the Henry J. Kaiser Family Foundation, the average employer pays 82 percent of the premium for an employee’s single coverage, and 69 percent of an employee’s family coverage.
As for freelancers, contractors, and anyone who doesn’t have an employer-sponsored plan, here’s how you can find a health insurance plan:
Use HealthCare.gov to find your state’s Marketplace
One easy way to find a health insurance plan is to go to HealthCare.gov and type in your zip code. Depending on where you live, you’ll either be redirected to your state’s Marketplace to look for plans or you’ll stay on HealthCare.gov to view your options.
Once you’ve done that, you can compare the various options and sign up for whichever plan makes the most sense for you.
Another benefit of shopping through government marketplaces is that you can find out if you qualify for even lower rates through plans like Medicaid. Fitzgerald says that many people don’t realize they may be eligible for these subsidies (or for plans that assist in your healthcare costs).
Get help with comparison sites
Although the Marketplace is where you need to go to sign up for health insurance and to see if you qualify for a subsidy, you can get a bit more hand-holding in comparison shopping through sites like Policygenius. According to Fitzgerald, they not only make it easier to search and compare, they also show you plans that you can’t see on the Marketplaces.
That’s because there are two types of plans: On-exchange and off-exchange. Off-exchange plans offer more specific options that might be worth exploring if a subsidy isn’t in the cards for you.
If you opt to try comparison sites to help you shop for a plan, you can then apply for the best one for you on your state’s Marketplace website.
Invest time now to set yourself up for the best possible scenario
We all want to know how to find cheap health insurance, but it’s important to do a holistic comparison that sets you up for success throughout the year. Remember, it’s not just about the monthly premium, it’s also about the other costs you can incur throughout the year.
Keep those deductibles and copays in mind just as much as your monthly premium, and make sure to consider how much you’ll need healthcare services. Then you can make a smart and economical choice for your health insurance needs.
Looking for even more ways to save? Check out this guide for cut down on your health insurance costs.
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1 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Splash Financial loans are available through arrangements with lending partners. Your loan application will be submitted to the lending partner and be evaluated at their sole discretion. For loans where a credit union is the lender, or a purchaser of the loan, in order to refinance your loans, you will need to become a credit union member.
The Splash Student Loan Refinance Program is not offered or endorsed by any college or university. Neither Splash Financial nor the lending partner are affiliated with or endorse any college or university listed on this website.
You should review the benefits of your federal student loan; it may offer specific benefits that a private refinance/consolidation loan may not offer. If you work in the public sector, are in the military or taking advantage of a federal department of relief program, such as income based repayment or public service forgiveness, you may not want to refinance, as these benefits do not transfer to private refinance/consolidation loans.
Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of May 1, 2020.
Fixed APR: Annual Percentage Rate [APR] is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed Rate options range from 2.88% (without autopay) to 7.27% (without autopay) and will vary based on application terms, level of degree and presence of a co-signer. Rates are subject to change without notice. Fixed rate options without an autopay discount consist of a range from 2.88% per year to 6.21% per year for a 5-year term, 3.40% per year to 6.25% per year for a 7-year term, 3.45% to 5.08% for a 8-year term, 3.89% per year to 6.65% per year for a 10-year term, 4.18% per year to 5.11% per year for a 12-year term, 4.20% per year to 7.05% per year for a 15-year term, or 4.51% per year to 7.27% per year for a 20-year term, with no origination fees. The fixed interest rate will apply until the loan is paid in full (whether before or after default, and whether before or after the scheduled maturity date of the loan).
Variable APR: Annual Percentage Rate [APR] is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Variable rate options range from 1.99% (with autopay) to 7.10% (without autopay) and will vary based on application terms, level of degree and presence of a co-signer. Our lowest rate option is shown with a 0.25% autopay discount. Our highest rate option does not include an autopay discount. The variable rates are based on the Variable rate index, is based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of April 27, 2020, the one-month LIBOR rate is 0.43763%. The interest rate on a variable rate loan is comprised of an index and margin added together. The margin is a fixed amount (disclosed at the time of your loan application) added each month to the index to determine the next month’s variable rate. Variable rate options without an autopay discount consist of a range from 2.01% per year to 6.30% per year for a 5-year term, 4.00% per year to 6.35% per year for a 7-year term, 2.09% per year to 3.92% per year for a 8-year term, 4.25% per year to 6.40% per year for a 10-year term, 2.67% per year to 4.56% per year for a 12-year term, 3.44% per year to 6.65% per year for a 15-year term, 4.75% per year to 6.93% per year for a 20-year term, or 5.14% per year to 7.10% for a 25-year term, with no origination fees. APR is subject to increase after consummation. Variable interest rates will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. The maximum variable rate may be between 9.00% and 16.00%, depending on loan term. The floor rate may be between 0.54% and 4.21%, depending on loan term. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.
Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.
Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.
Interest Rate: A simple annual rate that is applied to an unpaid balance.
Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of June 23, 2020. Information and rates are subject to change without notice.
3 Important Disclosures for SoFi.
4 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 2.98% APR (with Auto Pay) to 5.79% APR (with Auto Pay). Variable rate loan rates range from 1.99% APR (with Auto Pay) to 5.64% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of July 31, 2020, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 7/31/2020. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at [email protected], or call 888-601-2801 for more information on our student loan refinance product.
© 2020 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.18% effective July 10, 2020.