Individual Health Insurance
For most people, group health insurance is a better choice than
individual health insurance. Group insurance usually costs less and
offers more benefits.
However, some people can't get group health insurance because
they are self-employed, work for a small company, have run out of
COBRA benefits, or for some other reason. They must turn to
individual health insurance plans -insurance they buy themselves
Many insurance companies offer health insurance plans to
individuals. However, if you're over 50 years old, there can be
- It might be harder to find a company that will sell you a
health insurance policy, especially if you have a serious medical
- You might have to get a medical exam to prove you are
insurable, (you don't have a serious medical problem).
- Individual insurance usually costs more than group insurance.
- You might get fewer benefits than with group insurance.
It's important to shop around and compare health insurance
policies and plans. A first step could be to decide how much you can
afford to pay. Then, you can look for health insurance that will
give you the best health coverage for you and your family at that
The answers to the following questions can help you compare both
the cost and the benefits of the plans you are considering:
- How much of my doctor and hospital bills will this health
insurance plan pay for?
- How much will I have to pay each month (premium) for this
- How much will I have to pay (deductible) before the plan
begins to pay?
- How much will I have to pay for office visits to the doctor?
- Does this plan pay for preventive health care? This includes
routine medical checkups and shots, such as a flu shot, to prevent
- Does this plan have rules for people who already have serious,
chronic medical problems? Will these rules keep me from getting
the care I need? If so, for how long?
- What services are covered by this health insurance? Will it
pay for care at a hospital emergency room or urgent care center?
Does it cover routine surgery, hospital stays, doctor visits,
nursing home stays, home health care, and medical equipment and
- Does this plan cover visits to the eye doctor and the dentist?
- Does this plan cover prescription drugs?
- Does this plan pay for catastrophic medical costs, costs that
are so high it would take most of my money to pay for them? Is
there a limit to how much I must pay each year?
- Is there a yearly or lifetime limit to how much the plan will
pay for medical costs?
Individual Health Insurance Options
You have a number of options when shopping for individual health
- Fee-for-Service Insurance
- Managed Care Plans
- Open Enrollment in Managed Care Plans
- Association-Based Health Insurance
- High-Risk Pools
A fee-for-service insurance policy (also called indemnity
insurance) is a traditional kind of health insurance. It pays a part
of each medical service you get, such as doctor visits or hospital
stays. You pay the rest of the cost. You can go to any doctor or
hospital you choose. However, you usually pay a higher monthly cost
for your medical care than if you were part of a managed care plan.
Traditional health insurance is less common than it used to be.
Managed Care Plans
Many people get health insurance through a managed care plan,
such as a health maintenance organization (HMO) or preferred
provider organization (PPO.)
- In managed care plans, health insurance companies contract
with doctors and hospitals to provide health care to its members.
These doctors and hospitals make up the plan's network.
- In managed care plans, you may only be able to see the doctors
and hospitals that are part of the plan's network. Some plans,
like PPOs, allow you to use doctors and hospitals outside the plan
network, but you usually pay more.
- In HMOs, your visits to the doctor are pre-paid by the plan.
You only pay only a small copayment, from $10 to $20, each time
you visit the doctor.
Open Enrollment in Managed Care Plans
Some states require managed care plans to have an "open
enrollment" period each year. Open enrollment usually is a one-month
period during which managed care plans must let people join, even if
they have an ongoing, serious medical problem. This can be a very
helpful option if you have not been able to get health insurance
because of a medical problem. You can sign up for a managed care
plan during an open enrollment period without having to get medical
exams to prove you can be insured.
FYI: A few states require insurance companies to offer
their plans to people who have not been able to get health insurance
because of their health. This option can apply to more types of
health insurance than just managed care plans. Check with your state
insurance department to learn the rules in your state.
Association-Based Health Insurance
You might be able to get health insurance through a trade or
professional association. 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. Find out:
- How complete the coverage is
- How much of your medical expenses from routine doctor visits
and prescription drugs to major surgery will the insurance cover
- What it will cost each month
- If it covers family members
Your state insurance department can tell you what your rights are
under association-based health insurance plans.
In some states, high-risk pools might be a source of health
insurance for people who have not been able to get health insurance
because of a serious medical condition. High-risk pools are
considered the last resort, when all other attempts at getting
health insurance haven't worked out. To get health insurance through
a high-risk pool:
- You must have been refused health insurance coverage by at
least one or two insurance companies, or
- You could not find a health insurance plan with a monthly
premium less than the monthly premium in the high-risk pool.
Your state insurance department can tell you if your state has a
high-risk pool program.
Health Insurance Brokers
If you are having a hard time deciding which insurance plan is
best for you, some people talk to a health insurance broker. An
independent broker sells many different kinds of health
Other brokers sell plans from just one company, so it's best to
talk to a few such brokers before choosing one. Be sure you
understand how the broker is paid - whether you pay or the insurance
company pays the broker a commission. That may affect the plan that
the broker recommends. If you decide to use a broker, make sure the
broker will work in your best interest, and remember that sometimes
this costs more and not all insurance products are available through
Other Types of Policies
There are other kinds of insurance policies that should not be
mistaken for comprehensive health insurance. Specific disease
policies, such as "cancer policies," pay for care only for the
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 don't really help with your
health care costs. You would be better off checking out the other
Health: State-by-State List of HMO Report Cards Online
of the states that have HMO report cards, comparing the performance
of competing health plans in an area.
U.S. Agency for
Healthcare Research and Quality (AHRQ)
Gives guidance on
choosing health insurance in articles such as "Checkup on Health
Insurance Choices and "Choosing and Using a Health Plan."
Association of Insurance Commissioners (NAIC)
information for your state insurance department.
interactive site that gives a review of the health insurance
protections in your state.
the National Health Law Program, tips on getting the health
insurance you need.