Cut Your Medical Insurance Expenses & Save For Your Down Payment

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Today, medical insurance expenses are out of control and with new mandates on everyone to carry medical insurance, it will be more important than ever to carry some form of medical coverage. Oftentimes, those who are not covered by their employer or other form of coverage need to maintain their own policies. Sometimes this coverage is in the form of a plan offered for small groups or those who are self-employed. These plans may not meet the needs of everyone.

Why medical insurance is so important

While it may sound like a good idea to resist carrying a medical insurance policy, this is something that should be avoided. This is especially true if you are trying to save money for a mortgage down payment. When trying to save for house purchasing, you do not want to risk losing that money. Any type of illness, accident or hospitalization could quickly result in your down payment being used to pay medical bills.

Save money on medical insurance

There are a number of options that can be used to help you save money on medical insurance. One of the obvious choices is to try to get coverage through your employer or your partner's employer. When this is not possible, there are some other options that you can consider:

Self-employed associations - There are a number of organizations such as the Chamber of Commerce that offer group policies at a lower rate than an individual policy. Oftentimes, these policies include Health Maintenance Organizations (HMOs) or Preferred Provider Organizations (PPOs). These plans can be very costly since most services are offered with a low co-payment on most services.

Medical Spending Accounts - A medical spending account (MSA) may provide you with a cushion if you fall ill. Medical spending accounts mean that you put money away each month to use for any health related spending. While this may be sufficient to cover doctor's visits or sudden emergency room treatment, there are limits based on your earnings that may mean you do not have sufficient funds for long-term illness care or accident care. If your MSA does not cover all expenses, you may be forced to use your home down payment to cover additional expenses. These plans are only valid for those who work for companies with less than 50 employees or those who are self employed.

High deductible plans - A high deductible health plan is a plan that is offered in conjunction with a health spending account (HSA). These plans are ideal for young people who do typically need more than preventative care through the year. Preventative care is not usually part of the deductible though many high deductible health plans do count expenses on prescription drugs towards deductibles. Portions of the premium are paid into health spending accounts to be used towards expenses that are made pre-deducible. These plans can be very beneficial and generally cost far less than other plans.

Comparing health plans

Before you determine which health plan coverage will offer you the greatest savings, it is important that you do some research. If you are going to save money for a home down payment, this may be even more important. Some of the things that should be compared include:

Monthly premiums - What is the amount that you are paying to the insurance company each month? Determine how much of this premium you may "recoup" if you use the plan for basic medical care.

Coverage limits - Determine what each plan offers for limits on coverage. Catastrophic health care coverage may not be included in plans with very low premiums.

Deductibles matter - While a high deductible may be ideal for your needs, find out what expenses are included in the deductible. Remember, not all plans are created equally.

Co-payments - Many high deductible plans offer preventative care with co-payments as well as prescription drugs at lower costs. Make sure that you carefully review these policies so that you do not wind up paying for coverage you may not need.

Today, having some form of medical insurance is crucial. When you are attempting to save for a house purchase, it is even more important. You do not want find yourself tapping into your home down payment because you avoided having health insurance coverage, especially when the unexpected happens. Once you're done saving money on your medical insurance, find out ways to save on your dental insurance too.

This article is written by guest author Doreen Martel exclusively for Save For House.

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