Finding non-employer based health insurance is becoming a reality for more Americans.
Approximately 90% of Americans under age 65 receive health insurance through their employers, according to the Washington D.C.-based trade group, America’s Health Insurance Plans. But if you belong to the 10% who don’t receive coverage through your job, you may find the individual market for health insurance somewhat intimidating. Take it step by step, however, and you can learn the market and find the policy that best fits your needs.
To start, identify the features of a health insurance policy that are most important to you, says Carol Kelel, owner of the Jane Aubrey Group, a health insurance agency in Bingham Farms, Mich. For example, do you want unlimited office visits? Or is it more important to be able to go outside the network to see a specialist? What level of deductible would you like? You can find a range of policies, so it helps to have some idea of your needs and preferences before you start zeroing in on specific ones, says Kelel.
Do Your Research
The next step is to research the options available. One web site that can get you started is CoverageForAll.org, published by the Foundation for Health Coverage Education, based in San Jose, Calif. From the site, you can download a matrix of health care options within your state including the phone numbers and web sites of both government-sponsored and private health insurance policies for individuals and families. The matrix also offers information on policies that cover individuals with pre-existing conditions.
Another online resource is eHealthInsurance.com. By providing a bit of information on yourself, including your ZIP code, age and gender, the site assembles, working from its universe of 10,000 plans, a list of insurers offering covering in your area. It will include such information as the plan type—for instance, an HMO versus a PPO—the deductible and the charges, if any, for office visits. You can compare the premiums and services covered offered by different plans.
If you’d rather deal with a human than the internet, contact an insurance agent. Ideally, the agent should be independent, rather than affiliated with a specific company, Kelel notes. That way, he or she can present a range of options from different insurers. Most agents earn their money from the insurance providers, so you shouldn’t pay any more purchasing insurance through an agent, says Kelel.
To find an agent in your area, head to the Association of Health Insurance Advisors.
Prepare for the Costs
A word of warning: Purchasing health insurance individually, rather than through your employer, often prompts a case of sticker shock. That’s because most employers subsidize the cost of their employees’ insurance. On average, employers picked up about 73% of the cost of family coverage in 2008, according to the Kaiser Family Foundation.
Without an employer to cover the cost, you’re on the hook for all of it.
Last year, monthly premiums for individual policies were $158, and for family policies, $366, according to a survey of the individual health insurance market by eHealthInsurance.com. Nearly three-fourths (71%) of family plans had deductibles of less than $3,000. Generally, the older you are, the more you can expect to pay. Also, women pay somewhat more than men.
Another significant concern for purchasers of individual policies is qualifying for coverage. Not everyone’s application will be accepted, notes Amir Mostafie, consumer health insurance expert with eHealthInsurance.com. While five states (Maine, Massachusetts, New Jersey, New York and Vermont) are “guaranteed issue” and prohibit insurers from denying coverage to applicants who have pre-existing health conditions, that’s not the case in the rest of the country. If you live in a state that’s not guaranteed-issue and you have a health condition, a knowledgeable insurance agent should be able to tell you which insurers are likely to decline your application because of your condition, and suggest policies that are likely to be a better fit, Mostafie says.
It’s important to point out, however, that this is a concern primarily if you don’t already have coverage, Mostafie notes. If, for instance, you’re coming off group coverage through your job or COBRA, a policy should be available.
Finally, once you’ve purchased a policy, spend some time reviewing it, Mostafie says. Granted, not a fun task. However, you want to make sure the coverage squares with your expectations, so you’re less likely to run into unpleasant surprises when you have to use it.
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