3 Health Insurance Red Flags That Could Raise Your Premiums

While you can't always avoid the baseline premium increases that are part of the market, you can keep from red flagging your insurance plan so that you see even bigger premium increases.
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For many companies, health insurance open enrollment is underway, and millions of Americans are poring over their health care options.

Health care planning is vital part of your finances. According to America's Health Insurance Plans, more than one-sixth of the U.S. economy is devoted to health care spending. Your individual part in that is on the rise, leading to increased premium costs, no matter your health situation. The Kaiser Family Foundation reports that premiums for employer-sponsored family health coverage is up 3 percent in 2014, as opposed to last year.

Picking the right health plan is only part of the equation if you want to keep your health care costs as low as possible. While you can't always avoid the baseline premium increases that are part of the market, you can keep from red flagging your insurance plan so that you see even bigger premium increases. Here are 3 health insurance red flags:

1. Certain Voluntary Tests

There are some tests that can raise your insurance premiums, especially if you have private insurance rather than insurance through a large plan at work. Some of these tests might include STD tests. Not only that, but if you use your health insurance to pay for the testing, your results can become part of your permanent medical record and can impact your insurance rates in the future.

My doctor once suggested that I get genetic testing for cancer. While the test might have been useful, it would have cost me more than $1,000 out of pocket -- and my insurance premiums likely would have gone up later.

While some states have laws against genetic discrimination in health insurance, not all of these laws cover all types of cancer testing, and the laws and enforcement are spotty. Before you ask for a test, consider the impact it could have on your insurance premiums now and in the future -- especially if the test results end up a part of your medical record.

In some cases, it can make sense to, rather than have your testing done in a way that your insurance company pays for it to have it done privately and pay for it yourself. There are companies like STDcheck.com that will test you privately, and keep the results confidential so that they don't become part of your permanent record.

Some tests are even very affordable. Years ago, we had a hearing test performed for my son, and we did it privately, without involving the insurance company. We received a cash discount for paying immediately, the whole thing cost us less than $60 and it was never a part of the the medical record.

2. Unnecessary Medical Tests and Procedures

According to research from PricewaterhouseCoopers, up to $1.2 trillion of health care spending is the result of waste. That's close to half of all health care spending in the United States. Some of that waste comes from unnecessary tests and procedures.

Your own unnecessary testing or procedures can be a part of that. If you use your health insurance to pay for a number of procedures and tests, that can mean higher premium costs later. The more you use your health insurance, the higher your perceived health risk, the more likely it is that you could see higher premiums.

Before you agree to a test or procedure, make sure that it's necessary. Not only can you reduce the chances of larger premium increases down the road, but you can also avoid unnecessary out of pocket co-pay expenses.

Don't forget to check your insurance for unnecessary coverage as well. Years ago, I saved money by dropping maternity coverage that I didn't need from my plan. Things are changing due to the ACA, but you can still save by evaluating your coverage and avoiding getting more than you need, even if dropping maternity coverage is no longer an option.

3. Unhealthy Habits

Your unhealthy habits can lead to higher insurance premiums. One of the most common unhealthy habits leading to higher premiums is smoking. Some companies are even toying with the idea of charging obese employees higher premiums -- and even requiring health screening as part of open enrollment.

Your unhealthy habits can lead to expensive conditions, from hypertension to diabetes, that require more health care services. This can lead to higher costs, from paying more in co-pays because you make more office visits and have more prescriptions, to seeing higher premiums in some cases due to the number of health care services you use. This is especially evident if you have a private insurance plan that doesn't rely on an employer-sponsored group plan with numerous employees to help share the costs around.

In the end, your habits can mean higher health care costs. You can't completely avoid the inflation that comes with health care expenses, but you can reduce the impact on your own wallet.


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