If you need to purchase individual health insurance, it can be expensive. Unlike group plans, in which the costs and risks associated with health care are spread among many people, individual health policies are “medically underwritten” to take into account your personal health history. Any “pre-existing” condition such as heart disease, diabetes, and even pregnancy, can nix your chances of acceptance or boost your premiums. Some states require individual health insurers to offer everyone a plan, a mandate known as “guaranteed issue.”
Individual and family health insurance plans are usually described as either “indemnity” or “managed-care” plans. Put broadly, the major differences concern choice of healthcare providers, out-of-pocket costs and how bills are paid. Typically, indemnity plans offer abroader selection of healthcare providers than managed care plans. Indemnity plans pay their share of the costs for covered services only after they receive a bill, meaning the policy holder may have to pay up front and then obtain reimbursement from the health insurance company.
There are several different types of managed-care health insurance plans. These include HMO, PPO, and POS plans. Managed-care plans typically make use of healthcare provider networks. Healthcare providers within a network agree to perform services for managed-care plan patients at pre-negotiated rates and will usually submit the claim to the insurance company for you. In general, you’ll have less paperwork and lower out-of- pocket costs with a managed-care health insurance plan and a broader choice of healthcare providers with an indemnity plan.
Expect to pay more and more
Once you have a health plan, don’t expect your premiums to remain the same. Health insurance companies often seek permission to raise premiums. Additionally, some states allow health insurers to “file and use” rate increases, which means the insurers only have to submit their increases in writing and then they may immediately begin charging customers more money. Unless insurance regulators determine the rates are excessive, the insurers are allowed to keep charging the higher premiums.
Attorney Michael Dobronos says even if you have group health insurance, there’s a good chance your rates will climb. “Even though you have not presented any claims, others that are insured by the same type policy have presented claims. Rates are directly affected by the claims experience of the group insured under a given plan or policy,” Dobronos explains.
Help when you can’t afford an individual plan
If you’re a college student and are in need of coverage — perhaps you’re being dropped from your parents’ plan — your school might offer reasonable health insurance.
No matter what your age, there are several federally sponsored programs to help you if can’t afford the premiums for individual health insurance, providing you meet their eligibility guidelines:
• Medicare, a health insurance program for people age 65 or older, certain younger people with disabilities, and people with end-stage renal disease.
• Medicaid, a program for the poorest individuals and low-income families with children.
• The Children’s Health Insurance Program (CHIP), a plan that provides health care to children whose parents make too much to qualify for Medicaid, but earn too little to afford individual health insurance.
Many states offer health care plans for children of parents, who don’t have health insurance through work and cannot afford individual plans. Some states have expanded the plans to cover the parents as well.