What is an individual health insurance plan?

What is an individual health insurance plan?

An individual health insurance plan is a plan that is primarily given to self employed and unemployed people. Sometimes people choose individual coverage even if their company gives a plan. Individual plans in the health insurance industry do not actually refer to insurance for a person. It simply means that a company or employer does not pay a part of the bill. If someone pays the full prize of a family plan, such coverage is still considered as individual. Prices for such individual plans will always be more expensive than group plans. The price of a group plan is lower because participating companies buy many plans from an insurance company at a lower bulk rate and then the employer will pay a portion of the employees premium.

Individual health plans and group market plans offer both the same options most of the time. They offer HMO plans, preferred supplier organizations PPOs, POS plans and traditional service fees. For those who choose a group plan, they can get a significant discount on prizes and comprehensive policies. Keep in mind that a group insurance plan only covers someone while they are in the same job. If a consumer end up in a situation without having access to a group plan ie resigned without other employment options, they will quickly learn how expensive the options can be. Individual plans are usually recommended only to those persons without the group planning option.

Disadvantages of individual health insurance

Insurance companies may not cover people with such plans. It can be quite scary for those with a family or those who need serious care. With individual health insurance, there is a requirement to submit an application that is insured with the insurer with medical responsibility. This assumes that an insurer is examining a candidates medical record. As with most other types of insurance ie car insurance, premiums of risk are determined. Depending on the risk, insurance companies can choose not to offer any health insurance. Alternatively, an insurer may require certain exceptions to be added to insurance primarily for those with health problems. Some states offer what is known as guaranteed problem. This law forces insurance companies to provide an individual health plan to those who need one. This is a good protection but will ultimately increase the premiums.

COBRA Insurance

Another temporary option for those who leave an employer with a group of health insurance plans is what is called COBRA coverage. Cobra refers to the Consolidated Omnibus Budget Reconciliation Act established 1985. Many employers provide this coverage to employees for another 18 months after leaving the company. Such people will have to pay the entire premium if they choose COBRA insurance coverage. Consumers have 60 days to decide if COBRA works for them. If this is not desirable, consumers should start shopping for individual health insurance. COBRA insurance will cover all family members even if there are existing conditions. This can be a great advantage over certain individual plans.

Tips for finding an individual health insurance policy

If you have any favorite doctors, check if they are part of an insurance companys network ie, PPO or HMO in network.

Determine if you want an overall plan cover many potential expenses or if you want a catastrophic plan to cover you in serious health issues.

Do not always agree with the cheapest policy. You need to find a policy that fits all your personal needs.

Evaluate all economic considerations, including annual premium, deductible, co payment, maximum cost and annual limitations.

Some group insurance plans allow you to convert to an individual health plan. Although the conversion will cost more than one group plan, its significantly less than buying an individual plan right away.

If you have existing terms, most states require that you receive any kind of coverage within 63 days, or such existing terms will not be eligible for coverage.

Always check if your spouse has group plan options on her place of employment.

There are other types of group plans offered, eg. through AARP and other organizations.

The final thoughts of individual health insurance

Consumers should educate themselves on the types of individual health insurance offered. The best place to look is internet because of the availability of options and comparison shopping. Insurance premiums may vary considerably from one insurer to the next. Irrespective of personal circumstances, consumers should always have health insurance to cover in the event of serious injury or illness. Most consumers do not fully investigate all the possibilities. This surprisingly contemplates that someone can be


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