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These days everyone is crazy about savings. Millions of people are looking for ways to cut their costs because of the bad economy that is still haunting the US. And one of the most common objects of such cost-cutting tendencies is auto insurance. Because it’s mandatory in all states and can be rather costly people often feel that they don’t really need it. Some car owners even choose to drop it and then face serious financial and law problems when having an accident without any kind of coverage. You, on the other hand, can be smarter and simply employ the following cost-cutting methods to save some money on insurance:

Cut your coverage

If you have financed your car through a loan and have already paid it off you can consider dropping some coverage types to make your policy cheaper. First of all you can exclude gap coverage that is only useful during the loan pay out period. If there’s no significant market value to your car then consider dropping collision coverage as well. Uninsured motorist coverage can be particularly useful but if you’re driving mostly in areas with no uninsured drivers then there’s no sense in paying for this type of coverage. It’s really important that you review your policy every year and adjust it to your current insurance needs that will definitely change over time.

Raise the deductible

The deductible, as you may already know, is the amount of money you have to pay from own pocket before the coverage kicks in. In other words, it’s the amount of damage you can pay for without using auto insurance coverage. And the higher is the amount the lower are your rates, because there’s a lower risk of filing a claim for the insurance company. So make sure to avoid keeping the deductible low because it will raise your rates. By increasing the deductible from the standard $250 to $500 you can actually get up to 15% off your premium. But keep in mind that raising the deductible too high doesn’t make much sense because you should actually afford paying it when an accident happens in order to trigger coverage. (more…)

If there was a truth drug we could secretly administer to all politicians, you would almost certainly hear them agree the current health care services are broken. The reason is easy to state. As it stands, doctors and hospitals operate under the fee-for-service system. This gives them a direct financial incentive to do more work than may be strictly necessary. Even though they may explain everything to the patient and get “informed” consent, not all the tests are strictly necessary and many of the procedures they recommend have little chance of improving patient outcomes. So the best way to improve health care in this country is to change the incentives. Instead of paying for more care, we should be paying for better quality care.

Yet if you look at the proposals made by Rep. Paul Ryan, the Republicans are now committed to changing the cost base of health care. In particular, they want to change the entitlements our seniors have under Medicare. It’s undoubtedly true the service is buckling under the rising burden of spending. Way back in 1965 when we created Medicare and Medicaid, the government spent 2.6% of its budget on health care. Last year, our government spent 26.5% of its budget on health care. If you look at the projections published by the White House, President Obama is projecting this will rise to 30% by 2016. To give you a context, the projected spending on our defense is only 20% of the budget. Just think, all those weapons and people, fighting wars in Iraq and Afghanistan. Something has to be done to bring costs under control.

The unanswered question is how you can bring out-of-control spending under control. For Medicare, Ryan proposes introducing a voucher system in 2022. He believes that, if you give our seniors control over their own budgets, they will seek out the lowest-cost medications and treatments. If you do that to the 48 million seniors expected to be a part of Medicare in ten years time, this will either make or break the system entirely. But there’s no guarantee seniors will have the knowledge and determination to insist on less waste in the system as a whole. Take a simple example. If the effective treatment is ten pills spread over five days, will patients refuse twelve pills? Now scale that up across all treatments. It would be far better for government to regulate, setting national care standards so that our health care service only offers treatments where the evidence clearly shows them to be effective. This is the European approach where the public purse will only pay for the treatments approved by their local quality assurance departments. (more…)