4 Ways Health Insurance Can Save you Money

Close up of a doctor's white coat pocket full of pens and medical equipment.

Many health insurance shoppers will consider premium costs when purchasing health insurance. The full cost of a health planalso includes your out-of-pocket expenses, like the deductible, copays, and coinsurance.

As important as it is that your health plan is affordableand that the monthly premiums fit into your budget, it’s also important to consider the value health insurance offers. If you’re considering opting out of health insurance next year, evaluate the value of the following health plan offerings before you finalize your decision:

  • Discounted rates
  • Cost-sharing
  • Preventive care coverage
  • Additional features

While everyone has a different financial situation with varying constraints, health insurance is a worthwhile investment.

1. Discounted Rates 

Health insurance companies negotiate costs directly with hospitals and other medical care providers. These rates are then included with the health plans offered by the company. 

Some plans only have negotiated rates for in-network providers. Others have different negotiated rates for in-network care and out-of-network care. All health plans offer coverage for emergency services when a patient is admitted—whether or not the care was received from an in-network provider.

The amount the hospital or clinic usually charges is higher than the negotiated rate. The differences between the negotiated rate and the standard rate varies depending on how the insurance company has negotiated. 

However, when you receive an Explanation of Benefits (EOB) with the breakdown of costs, you’ll see:

  • What the hospital or clinic usually charges
  • What the negotiated cost actually was
  • What portion of the bill your health insurance company paid
  • The amount left for you to pay

2. Cost-Sharing 

Health insurance plans come with an annual deductible and annual out-of-pocket maximum. The deductible is the amount of money the insured must pay in cost-sharing over the course of the year before the insurance company takes on a greater responsibility for the costs. The out-of-pocket maximum is higher than the deductible. Once it is reached, the insurance company is responsible for the remainder of your covered medical expenses.

Health insurance plans often have separate deductibles for prescriptions and medical care. Health insurance plans that offer out-of-network coverage will have a different deductible and out-of-pocket expenses maximum for out-of-network care and in-network care. 

Health insurance companies determine cost sharing in a few different ways depending on how your plan works. With a traditional plan, you’ll have copays and coinsurance. Coinsurance means that the insured pays a certain percentage of the discounted medical bill.

Copays are a set amount that the insured pay when they receive health care services. There are usually set amounts for prescriptions, primary care visits, specialist visits, and emergency services. Payment may also be required beyond the copay after the bill is processed by the insurance company. The copay contributes to this payment.

High-Deductible Health Plans (HDHPs) with Health Savings Accounts (HSAs) work differently. Instead of having copays and coinsurance, you pay for your medical expenses as you receive medical care. You can use the funds in your HSA to pay these costs.

Funds in your HSA roll over year to year and can be invested. The money you put into your HSA is tax-free. The monthly premiums for HDHPs tend to have lower premiums because a greater cost responsibility is on the policyholder. Some people take advantage of these plans while they are healthy and save funds for medical expenses later in life.

The specifics of cost-sharing differ from plan to plan, so carefully reviewing your plan before signing up will help you understand how the cost-sharing works.

3. Preventive Care Coverage 

Because of the Affordable Care Act, health insurance plans cover preventive care fully. While the future of the Affordable Care Act is uncertain, coverage for preventive care is an important way that health insurance protects your finances.

Doctors can detect some health problems early on and implement treatment plans to prevent the issue from developing further. Regular visits to the doctor go a long way in avoiding expensive bills later, especially for preventable issues.

It’s especially important for people with some diagnoses and conditions to visit a specialist regularly as needed because some health issues can be managed successfully and future complications can also be avoided.

4. Additional Features 

Health insurance companies also offer the following helpful features with their plans:

  • Telemedicine
  • Nurse help lines
  • Care management

These additional features are helpful resources for people. Telemedicine allows plan members to work with a doctor over the phone or through video chat in non-emergency situations. Some companies offer this service to plan members for free, like Oscar. Other companies also offer it as an a la carte supplement to health insurance, like GoHealth.

Others may charge a fee when you use the telemedicine service. The fee for the telemedicine service may vary based on your plan and your insurer and can be cheaper and faster than setting an appointment with your doctor or visiting an urgent care.

Nurse help lines are another common offering among health insurance companies, including Cigna. This hotline gives people quick access to a nurse without needing to leave their home. In non-emergency situations, the nurse can answer questions and give advice on scheduling appointments. 

While these benefits are nice and do not require you to establish care with a doctor, you can always call your doctor’s office with questions to get similar assistance. If the doctor can’t take your call, one of the assistants can take a message and get back to you with a response in a non-emergency situation. Even after hours, there’s usually a doctor on-call. 

Another benefit some health insurers offer is care management. These can be helpful to people who want support with improving their health. Companies like Kaiser Permanente offer this with many of their plans to help members with chronic conditions.

Is the Investment Worth It? 

It’s easy to see how much your health insurance plan saves you on medical care when you review the EOB.

It’s trickier to determine if the cost of monthly premiums is worth the savings. If you have health insurance, you can keep track of how much you are spending on medical care, prescriptions, and premiums. Evaluate you EOBs over the course of the year to understand what the costs would have been without insurance.

Medical procedures, surgeries, and emergency medical treatment are more expensive than preventive care. Some of these events can be planned for in advance, but many cannot. 

Because of the high financial cost of these services, not having health insurance is a risk for your financial stability.


Alice Stevens loves learning languages and traveling. She currently manages content for BestCompany.com, specializing in personal finance, health insurance, Medicare, and life insurance.

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