With 35.8 million people insured under Obamacare, Medicaid, and/or Basic Health Plan, according to CNN, more Americans than ever currently have access to affordable health care. However, the American Rescue Plan Act of 2021, which served as a relief plan for Americans during the COVID-19 pandemic and fueled the uptick in enrollment, is now about to expire.
KFF explains that under this act, people including those who were above 400% of the Federal Poverty Level, were eligible for premium subsidies – meaning they paid no more than 8.5% of their yearly income for health insurance. If Congress does not extend the plan, beneficiaries receiving insurance through a marketplace will see an average 50% increase in their premiums in 2023, but it could be even more, which could spell out trouble for most insured Americans.
Insurance of any type is primarily a way to protect you, your loved ones, and your belongings. Health insurance ensures that you are able to pay for potentially life-saving treatments, while home insurance makes sure that you can financially recover from a disaster such as a fire or flooding. Insurance also happens to be quite a lucrative industry. An AskMoney guide to insurance premiums details how the insurance industry earns more than $1 trillion every year, with these premiums being collected by nearly 6,000 insurance companies across the United States. Even though insurance is a way to financially protect people from unplanned expenses, the rising premiums continue to cause issues for the middle class.
Over the last ten years, family premiums for employer-sponsored coverage have risen by 47%, according to a report from the Kaiser Family Foundation and reported by CNBC. “That rate outpaces both wage growth (31%) and inflation (23%) over the same time period,” they stated.
This rise in premiums together with the current inflation rate (the current CPI standing at a staggering 8.6% according to the U.S. Bureau of Labor Statistics) is predicted to cause a drop in insurance enrollment for 2023.
While we wait with bated breath for Congress’s decision to either extend the American Rescue Plan, there’s no reason to idly sit and wait – there are measures policy-holders can take to lower health insurance premiums.
Choose an HMO
While this may seem limiting, it’s one of the easiest ways to lower your premiums and healthcare costs overall. Enrolling in an HMO means that you’ll need to get referrals from your primary care physician in order to see a specialist, and your insurance covers care from doctors and clinics within your network. Any out-of-network visits will cost extra (except in the case of an emergency, of course).
Raise The Deductible
This option is for those who don’t tend to see the doctor very often and don’t have any chronic health issues that may be expensive to cover. If you choose a high-deductible option, your monthly premiums will go down, but you’ll need to be prepared to pay more out-of-pocket for doctor visits – planned or otherwise.
Work with an Insurance Broker
A broker’s job is to help you find insurance plans that fit your lifestyle, and more importantly, your wallet. While there’s often a cost for a broker’s service (they have to make a living, after all!), they will help you decide on the best insurance plan, find the most affordable options, and make sure that your premiums are the lowest they can be.
With insurance premiums about to soar in the following year, there are still steps insurance-holders can take to keep the costs down. By working with a broker to find the best insurance plan for you – which may include a higher deductible and choosing an HMO, depending on your needs – you should be able to lower your premiums and prepare yourself for the American Rescue Plan to be discontinued.
For more information on insurance and how to make the best decisions for you and your loved ones, visit us again at Crypto Savvy