Going solo on health insurance can be intimidating, but it doesn’t have to be if you break it down.
Unlike employer-sponsored plans that have to accept everyone at the same price, private plans in most states base their prices on several factors such as the applicant’s age, weight, smoking status and medical history. This makes individual health insurance harder to find—but not impossible.
Know your needs
“When someone’s looking to purchase coverage on their own, they should look at all their options. Don’t look just at the premium,” said Robert Zirkelbach, spokesman for America’s Health Insurance Plans, a national trade association that represents the health insurance industry.
Don’t start your search without knowing what you need. Ask yourself the following:
Once you know the answers, let your needs guide you in your search.
Check out different health insurance plans. If you are transitioning from an employer plan to your own plan, look into COBRA, the federal law that gives workers and their families the right to continue group health benefits after a job loss. While COBRA will cost more than you were paying while employed, you can continue the same plan and benefits for up to 18 months.
You have a few options to find and compare plans. For example, you can shop around using websites such as eHealthInsurance.com, healthinsurance.org, or HealthPlans.com. While these sites provide convenient ways to shop health insurance plans, you will have to provide personal information to gather quotes. Be prepared to hear from dozens of insurance plans right after you sign up.
If you want someone else to do the legwork for you, contact an insurance broker or agent through the National Association of Health Underwriters. These agents typically work for commission and represent multiple insurance companies. They can solicit plans and rates for you.
Premium versus deductible
Nearly every plan will have both a deductible and a premium. The deductible is the amount that must be paid out of pocket before an insurer will pay any expenses. The premium is the amount paid monthly or annually for coverage. Generally speaking, the higher the premium, the smaller the deductible—and vice versa. You can keep your health insurance costs down by lowering the premium, but prepare to spend more out of pocket for emergencies or procedures if you do so.
The most basic health insurance plans will offer coverage for medical emergencies, leaving you to pay for basic costs like doctor visits and medication. For some people, it may be cheaper to pay out of pocket for those expenses in order to save money on the cost of health insurance.
Know your plan
The best advice is often the simplest: Read the fine print, dredge through all the details, ask questions, and understand all terms. Make sure to:
“Make sure you know exactly what your health insurance provides,” Zirkelbach said. “The more information you know about the plan, the better off you are.”
Ilyce R. Glink is the author of several books, including 100 Questions Every First-Time Home Buyer Should Ask and Buy, Close, Move In!. She blogs about money and real estate at ThinkGlink.com and at the Home Equity blog for CBS MoneyWatch.
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