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Tips for buying Individual Health Insurance

Have you ever heard the phrase "There's strength in numbers"? Well this is particularly true when you're looking to buy health insurance coverage. As part of a group health plan at work, you can enjoy a lower rate on insurance premiums - but often a group health plan may not be an option.

 

If you're thinking of leaving your job, or starting a new job which doesn't offer health insurance, you may be surprised at how expensive the same coverage you had before is going to be when you buy your own individual health insurance plan.

 

An individual plan is coverage purchased on the private market, and not tied to workplace type benefits. Although they are called "individual" plans, they can cover you or your spouse and children.

 

Now there is no guarantee that an insurance company will accept you for an individual health policy. Individual plans are underwritten and the insurance company may reject you or attach exclusions to your policy if you have any pre-existing conditions. Under "guaranteed issue" laws, some states don't allow this practice and require that health insurance companies offer a policy, regardless of your history. The Kaiser Family Foundation has a list of guaranteed issue laws. People enrolled in individual plans pay premiums determined primarily by their expected health costs, so prices will be higher for those who are older or least healthy.

 

Crunch the numbers

 

Pricing is often the most fluctuating aspects of individual health insurance policies, so it's worth your time to shop around for different quotes. For instance, insurance premiums for similar products from different carriers can vary by as much as 50% for the same person expecting the same level of care.

 

If you're faced with finding individual health insurance, don't let any confusion tempt you to go without. Even if you're healthy, you could fall off a ladder or have a serious car accident and be forced into "medical bankruptcy."

 

Plus, you'll lose your rights to coverage of pre-existing conditions if you go without insurance for 63 days or more, a time period set by the Health Insurance Portability and Accountability Act (HIPAA).

 

Choosing an individual health insurance plan

 

When shopping for an individual insurance policy, the effort of doing your own homework does pay-off. According to Cheryl Leamon, spokesperson for Blue Cross Blue Shield Anthem, ask yourself the following questions:

  • Do I want to keep my current physician? If you have a particular doctor you want to keep, that might dictate whether an HMO or a PPO is right for you. In an HMO, you must use the plan's network of physicians in order to receive coverage. A PPO plan will let you visit any physician.
  • What's my household's anticipated health care need? Consider the care you and your family need on a regular basis. If your child has a disability, will he have to see a specialist routinely?
  • What will my out-of-pocket expenses and premiums cost? Does it make sense for me to pay a higher premium for lower out-of-pocket costs? If you want a comprehensive health insurance plan — and don't want many of out-of-pocket expenses - an HMO provides a very cost-effective plan. But if you're in your 20's or 30's, have no children and some extra savings, you can possibly save money by buying an insurance policy that covers only catastrophic illnesses. Remember, though, you'll have to pay out of your own pocket for routine visits and lab tests.

To estimate health plan costs, try this health care insurance cost calculator from Money-Zine.com.

  • Does the plan cover prescriptions or X-rays? Prescriptions are one of the most used benefits of insurance plans. Review the coverage of any plan to determine if your current prescriptions are covered and at what level. X-rays are also a routine part of many treatments, so it's wise to make sure X-rays are covered in a plan you're considering.
  • Do I prefer certain specialists? Some plans limit your visits to specialists. If you want to see a or chiropractor, be sure to ask your insurance agent about coverage for these type services. Some mental health services will likely have specific limitations as well.
  • What do I look for if I can't afford a policy that covers routine care? Look for comprehensive plans with higher deductibles rather than cutting back on coverage. A basic hospital/surgical plan might cost less, but if you end up in the hospital, the last thing you need to add to your list of worries is how you're going to pay for follow-up care once you're released.
  • What will it cost me for emergency care? Look at what costs, including co-pays or co-insurance, or services such as hospital and surgery care, apply towards the deductible. Leamon advises looking at what defines "emergency care" in your policy.

"Some policies may pay for a broken leg or an injury due to an accident, but won't cover an illness you were treated for in the emergency room. And still other more affordable plans will cover a visit to the emergency room, but not an extended stay in the hospital. Since emergency care can be the most costly in any health plan, it is best to read the fine print," she says.

 

Individual coverage at a group rate

 

In some states, if you are a self-employed sole proprietor, you can be eligible to buy health insurance as a "group of one" — even a home-based one — if you can show that you've been in business for at least thirty (30) days. The Kaiser Family Foundation has a list of states where you can buy guaranteed issue "group of one" health plans.

 

If you're leaving a job where you had a group health plan, you can ask the insurance company to convert the coverage to an individual health plan. The rate will be a bit higher than your group plan, but it's a way to secure health insurance if you have medical conditions. If your husband or wife has a group plan at work, he or she can also add you on.

 

If you live in a state that doesn't offer "group of one" policies, you might still qualify for a group rate if you own your own business and have at least one partner or employee. Does your spouse do the bookkeeping for your business? That's a two-person business right there, which would be eligible for a group policy.

 

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