Saving Money

Cut Healthcare Costs: Part II

Check Out Medicaid: If your income is low, or you've been unemployed for a period of time, you may be eligible for Medicaid. Medicaid is a program under the Social Security Act that provides medical assistance for certain individuals and families with low incomes and resources. Medicaid is the largest program providing medical and health-related services to America's poorest people.

While there are national guidelines that the Federal Government provides, each individual state establishes its own eligibility standards; determines the type, amount, duration, and scope of services; sets the rate of payment for services; and administers its own program.Thus, the Medicaid program varies considerably from state to state, as well as within each state over time.

Get Uncle Sam's Help: As of 2003, self-employed consumers can often deduct 100% of their insurance premiums. If you're operating a small business, either on the side or full-time, you may want to talk with your accountant to find out whether you can deduct your premiums.

Also keep track of your out-of-pocket expenses, mileage to doctor's offices, even meals (if you travel for certain types of medical care). If your medical expenses are high in one year, you may be able to deduct those that exceed 7.5% of your gross income. Ask a tax specialist for more details.

Consider An MSA: Known as a "medical IRA," a medical savings account ("MSA") can give you the benefit of saving for health care expenses along with valuable tax deductions.These policies are usually available both to self-employed individuals as well as groups of one. MSA's combine a high deductible plan with a savings account. For example, you may have a policy with a deductible of $2000 and you may contribute $100 a month to the plan to build up your savings account throughout the year.Your contributions to this savings account are tax deductible, and your earnings in the account are tax deferred. If you use the money in the savings account to pay for qualified medical expenses, those withdrawals are tax-free. If you don't use the money, it accumulates in an account where it can be saved for retirement.

Shop for an MSA just as you would another type of health plan - by contacting local insurance agents or searching online.You'll find helpful details about MSA's from AARP.

Watch Out For Scams! Before you sign up for a health insurance plan, make sure you check it out thoroughly.Thousands of consumers have been ripped off by health insurance scams that often look very real.These companies often employ slick marketing brochures with names that sound like trusted companies. It can be difficult to identify these companies but the first place to start is with your state insurance department.

In other cases, consumers signed up for health insurance plans that were real, but generated numerous complaints because of billing problems or slow payments of claims.That's the last thing you need when you're sick! A few steps can help here:

• Call your state insurance department to check out the insurance company you're considering and find out whether it is licensed, and what kinds of complaints have been received. Don't do business with a company that is not licensed, or through an agent that is not licensed.*
• Check the insurance company's financial stability rating with an independent company like A.M. Best www.ambest.com or Standard & Poors. This can help evaluate the company's ability to pay claims.
• Try an Internet search under the company's name, perhaps also adding the word "complaints" to bring up any news releases or articles about the company.

*Note: Self-funded health insurance plans (meaning the employer assumes the risk for the plan) are regulated through the U.S. Department of Labor, not individual states.