INDIVIDUAL HEALTH INSURANCE
Individual health insurance is exactly what it sounds like – coverage you purchase on your own, directly from an insurance company or insurance agent – as opposed to group insurance, which you typically receive through your employer. If you are 65 or older, you can also purchase individual insurance from private companies to help pay for some of the costs Medicare does not cover. These plans are usually called Medicare Supplement plans and you can read about those in our Medicare section.
There are many reasons someone under the age of 65 might need to purchase their own health insurance. Your employer might not provide health coverage, or you might be an early retiree, self-employed, or transitioning from COBRA. Individual Major Medical Health Insurance is available to help protect you and your family against health care costs and provides you access to care. You pay the entire premium each month; no employer makes any contributions. It is important to know that coverage is not guaranteed and the limitations around eligibility may vary.
A Fee-for-Service Insurance policy (also called indemnity insurance) is a traditional kind of health insurance. It partially pays for each medical service you get, such as doctor visits or hospital stays. You’re responsible for the remainder of the cost. The insurer calculates the amount they cover in one of two ways – by covering a percentage of the approved amount for the service (insurers maintain a list of what they think each service should cost, which can differ from what they actually cost), or a fixed amount. In the case of a fixed amount (also known as a fixed cash benefit), the insurer covers a fixed amount per service – $50 for a doctor visit, for example- even if the medical service costs you more.
One advantage of fee-for-service plans is that you can go to any doctor or hospital you choose. However, you usually pay a higher monthly cost for your medical care than you would as part of a managed care plan.
MANAGED CARE PLANS
It’s common to receive health insurance through a managed care plan, such as a Health Maintenance Organization (HMO) or Preferred Provider Organization (PPO).
OPEN ENROLLMENT IN MANAGED CARE PLANS
These plans have an annual open enrollment period that allows people to join the plan or make changes to their existing plan, regardless of medical history. The open enrollment period for these plans may vary by state.
ASSOCIATION-BASED HEALTH INSURANCE
Many professional, community and religious organizations offer their members health insurance coverage at group rates. If you are a member of any trade or professional association, ask if it offers health insurance coverage. This option may offer lower premiums than plans you purchase directly from a private insurer, but check the coverage and other out-of-pocket costs carefully to truly compare.
WHAT TO KNOW
When purchasing something as important as health insurance, it’s a good idea to create a list of questions to ask about each of the choices available to you. Here are a few things to consider:
CAN I KEEP MY DOCTORS?
This is one of the first questions many people ask when looking at health plan options. The answer to the question depends on which type of individual health insurance you choose. If you select a Health Maintenance Organization (HMO), you are required to receive care from within the plan’s network, so check to see if your doctor is in that plan’s network. If your doctor is a specialist, most HMO plans require that you first see a primary care physician for a referral.
Like HMOs, Preferred Provider Organization (PPO) plans have provider networks, but unlike HMOs, PPOs also let you visit any doctor or hospital you choose, without a referral. Keep in mind that you’ll pay less out of your own pocket if you see doctors and hospitals in the insurer’s participating network, but if any of your doctors are outside the network you can still see them under a PPO plan. It’s helpful to choose an insurer with a large, nationwide network of doctors and hospitals, since it increases the chances that your doctor is in the network.
ARE MY PRESCRIPTIONS COVERED?
Many insurance companies offer a choice of major medical plans, some with prescription coverage and some without. Comprehensive individual health insurance usually covers your prescriptions, with either a copay, or after a deductible. Be sure to check how a plan covers preferred, non-preferred, and generic prescription drugs, because plan details may differ. If you have a regular list of prescriptions, you may want to do some research into the plan’s formulary. A formulary is a list of drugs covered by the plan, and should tell you what your cost for each will be.
CAN I COVER MY DEPENDENTS?
Some individual health insurance allows you to add a dependent spouse and children or grandchildren to your policy – even if no other family member enrolls. Unlike employer-based plans, some plans require each family member to undergo medical underwriting, while others do not. Also, some plans may offer “Child Only” coverage. Be sure to ask about eligibility requirements, which can include criteria such as age, marital status, adoption status, legal guardianship or family relationship.
Before you purchase anything, speak to one of Amacs licensed insurance agents to compare individual health insurance plans available in your area. A first step could be to decide how much you can afford to pay. With a figure in mind, you can look for health insurance that will give you the best health coverage for you and your family at that price.
PLANNING FOR COSTS
When researching individual health insurance, you should be realistic about the costs balanced against the importance of good coverage. Think of health insurance as an investment in your health and your family’s health.
Premium rates for individual policies vary widely, depending on state rules, the type of coverage included, and the applicant’s age and health.
When you apply, an insurance company will look at your health history, the number of medications you take, and other health aspects to determine your eligibility for coverage.
One way to keep premiums manageable is to increase your deductible. Another is to look for a plan that just covers the basics – medical, hospital, and prescription drugs. Some benefits, such as coverage for dental, vision, and hearing care, may be more important to you than others, and you’ll want to keep them even if it means a higher premium. In many cases, you can pick and choose.
There are types of insurance policies that should not be mistaken for comprehensive health insurance. Specific Disease policies, such as cancer policies, pay only for care of a specific disease. Hospital Indemnity policies pay you a set amount of money for each day you are in the hospital. These policies may sound good but do not really cover all your health care costs. Research these kinds of plans very carefully to determine exactly what coverage you’ll be getting.
That is why AMAC is providing its members with access to your exclusive Personal Insurance Advisor. Individual policies accomplish the important goal of protecting you and your family against the uncertainty of big medical bills. Call AMAC today to find out how we can help!