Finding Affordable Private Health Insurance
When you work for yourself, or are considering working for yourself, getting affordable health insurance is one of this biggest financial obstacles. While this can be a huge expense, you can find the right insurance and potentially save money while getting the coverage you want.
Start with These Tips:
Consider High Deductible Health Insurance Plans
The higher your deductible, the cheaper your health care coverage will be. But, whether a high deductible plan works out well for you depends on what expenses you’re expecting in the next year. For instance, let’s say you found a plan that’s $350 per month for a $3,500 annual deductible, but another plan is $550 that has $0 deductible. You’re paying $2,400 extra for the $0 deductible plan. The plan could be worth it if you know you’ll have at least that in upcoming expenses, such as a dental procedure that will be covered that’s coming up, pay the extra funds. If you’re unsure, it may be best to get the higher deductible plan, and save for the difference in a Health Savings Account (HSA), which will be discussed later in this article. Also, consider differences in dependent costs. If your spouse or children will also be covered under the same plan, you want to consider if they’ll meet the deductible amounts, and what they’re monthly costs will be.
Save for Medical Expenses in a Health Savings Account
Before you pick a health insurance plan that has a high deductible, make sure you let the insurance company know you’d also like to set-up a Health Savings Account. A Health Savings Account is an account you can set up with a bank or investment company for your out-of-pocket health insurance costs. Having the money in a Health Savings Account means that you don’t pay income tax on this amount. For instance, let’s say you know you’ll pay $2,000 out of pocket this year for heath related expenses from eyeglasses to copays. If you put this money is a HSA, you won’t have to any income tax or social security tax on this money. This can easily save you $500 in taxes.
Look On and Beyond the Exchanges
Starting with the health insurance exchanges at healthcare.gov is always a good start for exploring health insurance options. You’ll also get information on financial help that may be available to you from your state if you’re in a lower income bracket. But, you’ll always want to search online for health insurance, talk to individual insurance agents, and use online comparison tools. Then make phone calls and compare options before selecting insurance.
Remember, You Can Deduct Health Insurance on Federal and Potentially State Income Tax Returns
The nice thing about federal tax deductions for both deducting the cost of deducting health insurance plan costs when you’re self-employed is it doesn’t just save you money on taxes, you also don’t have to pay the social security tax. That’s an extra 12.4 percent of your income that you get to keep. So, if your health insurance plan costs $6,000 annually, and you’d pay a third of that to taxes, you’re spending $4,000 out of pocket. Thus, it reduces your monthly budget by $335 instead of $500.
Consider a Part-Time Job
When you’re just starting out in the world of self-employment, a part time job that provides health insurance may help you make a little more income while building your business and bridge the health care gap.
Affording good health care is a combination of prevention and picking the right plan. Consider how you can reduce long-term medical costs with preventative care and good health habits. I made a decision that for me, paying extra for high quality produce and being part of a fitness experience I enjoy is part of my medical expenses. When you’re healthy you can choose a high deductible plan with more confidence.