If you are self-employed, you have probably battled with the decision to purchase health insurance. It is a large chunk of change for individuals who are self employed. An effective method to save money on health insurance costs is to open a health savings account. The large costs of premiums are cheaper with a health savings account because you are participating in a high deductible plan. With a health savings account, the funds that are deposited into the account are not subject to federal tax at the time of deposit. A health savings account can only be used to pay for eligible medical expenses at any time without being subject to a tax liability. The money can be used for personal use, but it will be treated like an IRA account.

The best part about a health savings account is that you are in control of the money. You can select whatever doctor you would like and can choose the type of care you need without being told that you need to be pre-qualified or referred by another doctor in order to see a specialist. If you already pay for health insurance through your company, you should still look into a health savings account because it can save you on the smaller medical costs like prescriptions. Your employer generally will deposit a certain amount into the health savings account and you can make deposits as well. The funds you deposit will carry on from year to year until you close your health savings account.

A health savings account will have a lower health insurance premium that traditional health insurance. Your deductible will be higher than traditional health insurance because you are now paying for the routine health care costs. Health savings accounts are created to "force" people to use less health care. The theory behind a health savings account is to make individuals think of the money in the health savings account as their own so they will not want to spend it on a routine doctors visit.

Increasing your out of pocket costs will reduce your overall premium cost. Contact your health insurance company about increasing your deductible amount so you pay more at the doctor's office. A normal, healthy individual will not need to visit the doctor on a frequent basis, so increasing your deductible from $2,000 to $2,800 could save you around 18% on health insurance premiums. You can also reduce your total health insurance premium by getting rid of your prescription drug card. Generally you can save anywhere from 20% to 40% on your total premium by getting rid of the prescription drug card. You will save yourself a ton of money by paying for the prescription on your own and avoiding the doctor's office for every ache and pain you have.

Another way to save on health insurance is to buy private health insurance. Your employer may offer health insurance, but the cost could be more expensive than you could spend on private health insurance. Many states actually offer a health insurance program for individuals who cannot afford the high costs of contracted health insurance. You can find private health insurance for less than $500 a year or $50 a month. Finding coverage like this is a great benefit to someone who is on a budget. If you have a pre-existing condition and you are shopping for health insurance, you will be looking at a higher cost. Most private health insurance companies will charge roughly $2,500 a year for someone with a pre-existing condition, while a company insurance plan could charge you upwards of $5,000.

Check the health insurance policies of your state. Many states will offer low-cost or no-cost health insurance to women and children. You don't even need to be low-income to receive health insurance in many states. Because 44 million Americans are un-insured, states are doing all they can to provide options to everyone. Health insurance mandates are quickly catching on in many states. A health insurance mandate basically provides health care for everyone. You will be placed into a large pool of other insured individuals and given a rate for the entire group. If you are in a low-risk pool, you can significantly offset your health insurance costs because no one is using the insurance. However, if you are placed in a high-risk pool, you will pay more money. Generally, the pools are mixed with low-risk and high-risk individuals. This is frustrating for low-risk individuals because the premium is based on everyone in the pool. So basically even though you don't use your insurance, the high risk individuals will increase the rates for you and everyone else in the pool.

Health insurance mandates will have reduced benefits in order to lower the premium. When your benefits are reduced, you may not be able to visit your existing provider or receive health care for some specific needs. An insurance plan with a low premium usually has a higher co-pay or a larger deductible to make up for the loss of money.

Health insurance costs are generally higher for a family plan. Family plans are usually only allowed through one insurance company and you are not able to purchase it through your employer and your spouse's employer. It may be cheaper to split the coverage and insure half of your family through one plan and the other half with your spouses. Family health insurance plans usually cost $300 a month or more. Since family health insurance is so expensive, you should consider shopping around for the best deal before assuming that your employers plan is the only option. It may be cheaper to keep the employee on the employer's health insurance plan and purchase private health insurance for the rest of your family.

During your employer's open enrollment period, you should check to see what benefits are available and which one will suit your needs. Most employers offer at least 2 plan options. It is important to reassess your health insurance needs each year as you can anticipate needed coverage for certain procedures like knee replacement, maternity expenses, immunizations, and physical therapy. If you are a normal, healthy family, reduce your benefits. The more benefits that are available to you, the more money you will pay. Check to see if your health care provider is in network, if they are, you don't need to pay extra to have options. Some health insurance costs will increase if your policy allows you to choose your provider.

You can also reduce your health insurance costs by getting in shape. More than 70% of employers are offering incentives to help their employees get in shape. Wellness programs encourage employees to lose weight, quit smoking, or reducing other unhealthy activities. Cash or contributions toward a health-care account will be given to employees to help offset the out of pocket costs. You will save roughly $300 annual by participating in a wellness program. Companies also have the right to charge more money to employees who engage in unhealthy behavior. Smoking causes many employees to pay more than $400 a year extra for health insurance coverage.

One last thing you can do to save on health insurance costs is to save money. When you reach retirement age, you may face large medical expenses that aren't covered by Medicare and other senior health insurance programs. Invest some money into a CD account or a Simple IRA and use this money for health care when you reach retirement.