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Health Insurance Options Help Tight Family Budgets
By Theresa Green

          Rising gas prices, higher home prices and increasing costs overall have many Oklahoma families feeling the economic pinch.  A lot of families have begun to re-evaluate their expenses in hopes of trimming the family budget. Insurance experts say many may not think to evaluate their health insurance coverage, but probably should.

         “In many instances, there are ways to save some money while still ensuring you get the coverage you desire for yourself and your family,” said long-time Oklahoma insurance specialist John Krogh of AARK Insurance.

         Krogh pointed out that many employees find themselves bracing each fall for the next round of changes in their company’s health insurance plan.  The Kaiser Family Foundation reports the cost of family coverage rose 59 percent between 2000 and 2004. Although the cost increase dropped to 9.5 percent in 2005, it is still increasing three times faster than worker’s wages.

          Oklahomans who are insured through an employer’s group health insurance plan may opt to add their spouses and children to that plan as well. Although, Krogh said sometimes they do so without considering other options, paying for it each month often as a deduction from their paycheck. Yet, it may not be the most cost-effective plan for the family.

          In fact, Krogh said there are often substantial savings involved when spouses and children move from an employer’s group insurance plan onto their own individual plan.

           “Jaime has great insurance provided through her job,” said Krogh. “She paid $260 each month to have her two-year-old son covered under that same plan.  But we found that she could buy comparable insurance for her son through in individual policy at a cost of only $97 a month. That’s a significant help to the family budget each month and an annual savings of more than $1,950.
           ”Krogh pointed out that another way to help save some money each month on your out-of-pocket insurance costs is to consider choosing a higher deductible.  The deductible is the amount of money you agree to pay each year toward your individual or family health care costs. It is in addition to the premiums you pay each month.  In other words, the premium is the amount you pay to have insurance, but you will also still pay for health care services until you reach your deductible
          “When evaluating deductibles, our goal is to help you select the right deductible for you and your family,” Krogh explained. “Oftentimes, families see substantial savings just by choosing a higher deductible.”

It Pays to Shop!
Real Life Esamples of Insurance cost savings

Jaime
School Teacher, Hooker, Oklahoma
2-year-year-old Son's Insurance Coverage
Per Month Per year
Employer's Plan $260.00 $3120.00
Individual Plan $  97.11 $1265.32
Savings $162.89 $1265.32
David
Yukon, Oklahoma
Insuring Self and 2 children
Per Month Per Year
$500 Deductible $463.07 $5556.84
$2,500 Deductible $224.19 $2690.28
Savings $238.88 $2866.56
Jason
Piedmont Oklahoma
Insuring Self
Per Month Per Year
Wife's Group Plan $358.78 $4305.36
Health Savings Account $  77.87 $  934.44
Savings $280.91 $3370.92

          He said that was just what happened with David, an Oklahoma father of two.
          According to Krogh, David opted for a plan that included a $2,500 yearly deductible and a $224.19 monthly premium.

       
  “Had he gone with a $500 deductible plan for his family, he would have paid $463.07 a month,” Krogh said.  “So his monthly savings just by selecting a higher deductible are about $238  a month or $2866 less per year.  In other words, he saves more than his deductible in just one year. That’s significant.

          Another money-saving insurance option families might want to consider is a Health Savings Account or HSA.  Krogh said these plans feature high deductibles and also give the insured the chance to put money into a special savings account each month.  Those funds can then be used to pay for a variety of health-related services.  The money deposited into the HSA is also tax-deductible.
          “Health Savings Accounts are really growing increasingly popular, especially with the self-employed,” he added. “Many like the idea of being able to set up a savings account that can be used for medical, dental, vision and other health-related expenses throughout the year.  They also enjoy the tax benefit that the account provides.  Plus the money, if not used, rolls over from year to year.  At age 65, you can begin drawing the money out as supplemental retirement savings.”

          The HSA was just the ticket for Jason,  Krogh’s son-in-law.       
         
Jason could have been covered under his wife’s group plan at work.  Adding him to the plan would have cost the couple about $359 a month.  Instead, Wood opted for an HSA.  It carries a monthly premium of just under $78 a month. After he meets his $2600 deductible, his plan pays 100% of his allowed medical expenses.

“There are a lot of options,” said Krogh. “I think the bottom line for families is that while many increased expenses are outside of their control, health insurance is an area where you do have options and those options may bring overall savings. A good health insurance agent can help you research your options and find the right plan for you.”    
             To learn more about health insurance options and which may be right for you, visit
www.aarkinsurance.com .
 

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