Beginner’s Guide to Individual Insurance
Posted in Health Insurance , Individual Insurance
November 18th, 2009
Individual insurance is a big piece of the health care puzzle, but for many people it’s an unknown and very complicated commodity. Understanding individual insurance can lead to new opportunities for savings, care, and an improved quality of life. To that end, Go Insurance Rates has created an overview of individual insurance for beginners.
What Is Individual Insurance?
Individual insurance is health insurance that a person acquires on their own, as opposed to having it provided to them by their employer or a government program. People who work for businesses that don’t offer health care or who work freelance and go from job to job must go out and find a health insurance policy on their own. Joining them are people who don’t qualify for government programs and those who have lost their jobs and their health care coverage along with it.
Types of Individual Insurance
One reason that individual insurance is so confusing to people is because there are so many options available. These include:
- Fee-for-service Insurance
This kind of traditional health insurance pays for a part of each medical bill. It allows you to go wherever you’d like for medical treatment, but the monthly premium tends to be quite high. - Managed Care Plans
Managed care insurance is the most prevalent form of health insurance provided in America today. Made up of PPOs (preferred provider organizations) and HMOs (health maintenance organizations), managed care plans contract with doctors, hospitals and other health services providers. If you enroll in an HMO, for example, you will be given a list of doctors you can see that work with the plan. Visits to doctors and hospitals outside of the plan will not be paid for. If you enroll in a PPO, your visit to a doctor outside the network will be paid for but your co-pay will be higher. - Open Enrollment in Managed Care Plans
One of the most problematic aspects of health insurance is the preexisting conditions clause. Health insurers use this to avoid insuring high-risk individuals. For example, if you have a heart condition that is diagnosed before your health insurance takes effect, then all treatment related to that condition will not be covered by your health insurance plan. A heart attack followed by bypass surgery and a two-week hospital stay would be your fiscal responsibility, which few people can afford. Diabetes, cancer, and oftentimes even pregnancy will not be covered if it’s determined that they precede the start date of your insurance coverage.
In order to give the uninsured relief, some states require health insurance providers to offer a month-long open enrollment window every year during which they can enroll in managed care plans.
High-Risk Pools
People who are hard to insure because of their medical problems can join high-risk pools. In order to qualify, you have to have been refused coverage by a health insurance provider. High-risk pools are not available in every state.
Why Get Individual Insurance?
Most people who get individual insurance do so because they don’t have a choice. According to Kaiser Health, approximately 14.5 million Americans currently pay for their own individual insurance. However, many people who do have health insurance provided for them can and do choose to buy supplemental insurance policies as added protection. Some examples of supplemental health insurance policies include hospital indemnity, dental, and long term care. By getting these supplemental individual insurance policies, you’re protecting yourself from what could be financially disastrous medical bills. To underscore just how financially disastrous they can be, 62% of all declarations of bankruptcy stem from unpaid medical bills. What’s more, many of these people declaring bankruptcy had health insurance to begin with.
How much Do Individual Insurance Plans Cost?
There are many different individual health plans currently available in the United States, and their price varies from city to city and state to state. In California for example, a male, 35-year-old non-smoking resident of Los Angeles can choose from 116 different plans that begin at $68. A 50-year-old female smoker living in Indianapolis can study 87 different health insurance options that start at $209. When it comes to health insurance, the rule of thumb that applies to all areas is that the younger and healthier you are, the lower your premium will be.
To begin looking for your own health insurance rates, check in with Go Insurance Rates. We provide you with the free quotes you need to get started looking for affordable health care options.