In the US, the most popular health covers are group health insurance from employers and government coverage. Employer-based covers account for 56% of the entire market while a good chunk of the rest (not all) is under public programs – Medicaid and Medicare.
The remaining portion of the insured population subscribes to individual private health insurance. And that’s precisely what this article is all about.
This article is for you if you have no idea how to take this health insurance route traveled on by only a few. Keep reading to find out.
Individual private health insurance – what it is
This cover is any insurance that is neither by the government nor your employer. As such, you are responsible for everything that concerns your cover – things like the company, the plans and the number of people you wish covered (including family members is an option).
Who is it for?
Circumstances push you to seek your own health cover. Here are possible scenarios that might require you go for individual private health insurance:-
- When you are unemployed – this depends on how you were rendered jobless. If you were out rightly fired, then finding your own health insurance is the only option. But in the case of a job loss due to downsizing (or some other qualifying event), you’ll still be eligible to be covered under your former employer’s plan (as per Consolidated Omnibus Budget Reconciliation Act). The only caveat is that you will have to pay the full amount yourself instead of your employer chipping in. Beware, though. COBRA can only be in place for 18-36 months. Beyond that time, you’ll have to go for your own individual private health coverage.
- When you retire – retirement means you are no longer your employer’s responsibility as far health coverage is concerned. And that means an individual private health insurance plan is your most probable option; that’s if you are under the age of 65. Beyond this age limit, you can sign up for Medicare and supplement it with either Medigap or Medicare Advantage. All these three plans only cover you individually; no family member can be included.
- When you are self-employed – you will have to service your health cover if you are self-employed. An exception will be when your spouse is an employee.
- Part-time employment – part-time employers don’t offer covers for a larger part. Any health insurance is solely your own responsibility.
- When you turn 26 – the Affordable Care Act stipulates you are only eligible for your parents’ health insurance if you are 25 years and below. As soon you’re past that, you are on your own as far as a health cover is concerned. You’ll be lucky if you would have landed employment. Otherwise, an individual plan is what you’ll have to settle for.
- When your current insurer walks out on you – your insurer may cancel your coverage due to a reason or another. Alternatively, the premiums may suddenly go up making it unaffordable for you to keep up with your plan.
Where to start
How to sign up for a private health cover is based on the groups of people you’ve seen above. Basically, we have retirees and the rest.
For retirees, you might want to look at Medicare and what it takes care as far your health is concerned. While at it, look into how it can be used with private Medigap. You can also opt to replace it with Medicare Advantage. Get all this information on the Medicare website.
For the other groups, be sure to consider your options under the Affordable Care Act as the first step. That way, you can tell of all the available subsidies you qualify for and how to file for them. One of the conditions to access these subsidies is to apply for a cover within the laid down enrollment period. For next year, this period will run from Nov. 1 to Dec. 15.
Beyond the period, you can still have a consideration under the ACA in case of certain life events. These events include:-
- A move to a new location – may be a new school or new zip code, a move to the US, etc.
- Recently married or divorced
- Expiry of a cover by your employer
- Losing the cover of a parent when you turn 26
- Getting a new kid, through birth or adoption
See the full list of these life events here. After these events, you have up to 2 months to apply for your individual private health insurance cover.
In the unfortunate case where the enrollment period has elapsed and there is no qualifying event on your part, you can still go for other plans outside ACA conditions. The caveat here is that the plans will not be as comprehensive. Additionally, they also won’t be eligible for subsidies.
Plans to consider
You can decide to sign up for any of the following plans in your private health insurance cover
- High deductible health plan
- Point of service plan
- Health maintenance organization plan
- Consumer-driven health plan
- Exclusive provider organization plan
- Preferred provider organization plan
It is important to note that not all companies have the option for you to choose your plan. You may just have to do with what they offer. Shopping around can help you out a big deal.
A short-term plan can be a great option if you want to go for an ACA-compliant cover but the enrolment period is over. The plan can help you out for the time being as you wait for the next period.
Some factors to consider when choosing a plan
The above plans cannot all surely contain what you’ll want. Make a list of what you need and go for a plan that outlines a majority of your needs at affordable premiums.
You can use the list below as a lead:-
- Need for specialty services
- Co-pay – for the hospital stay, drugs (generic and name-brand), professional services (surgery, lab tests), an office visit, etc.
- Benefits – lifetime or annual maximum
- Availability of free or discounted services for preventive care
- Need for pregnancy services
- A preferred doctor
Individual private health insurance is an option if you cannot be covered through an employer or by the government. Getting a cover shouldn’t overwhelm you.
Have an idea of what you want and start shopping for options.