If you aren't eligible through your employment, you have a few options.
Private HMO insurance plans: If your business does not provide health insurance as part of an employee benefits package, you may want to consider obtaining your own health insurance from a private firm.
A premium is the amount of money paid to an insurance provider for coverage by an individual or a business. Premiums for health insurance are usually paid on a monthly basis. Employers who provide an employer-sponsored health insurance plan usually pay a portion of the premiums. You will be responsible for the entire cost of the premiums if you need to cover yourself.
It’s natural to be anxious about the cost of obtaining health insurance for oneself. However, depending on the level of coverage you require, you have a variety of alternatives and pricing to choose from.
When you buy your own insurance, it’s more complicated than just picking a workplace plan and having the premiums deducted from your paycheck every month. Here are a few pointers to assist you through the process of buying health insurance on your own.
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KEY TAKEAWAYS
- If you are under the age of 26, are unemployed or self-employed, work part-time, are beginning a business with workers, or have recently retired, you may need to acquire individual healthcare coverage.
- If you don’t have access to an employer-sponsored health insurance plan, the Health Insurance Marketplace, which was established in 2014 by the Affordable Care Act, is a good location to start looking for coverage (ACA).
- You can enroll in Medicare if you are at least 65 years old or handicapped, with the option to supplement your coverage with a private Medigap or Medicare Advantage plan.
How to Purchase Private Health Insurance
Some Americans obtain insurance through their companies’ group health insurance plans.
Seniors and the disabled are covered by Medicare, while low-income Americans are covered by Medicaid.
Medicare is a government-run healthcare program for anyone over the age of 65. Medicare may also be available to certain disabled young people and adults with the end-stage renal illness. Medicaid is a government-funded healthcare program for low-income Americans of all ages.
Individuals and families can purchase insurance policies directly from private insurance firms or through the Health Insurance Marketplace if their employer does not offer an employer-sponsored plan and they are not eligible for Medicare or Medicaid.
Situations in which you may require private health insurance
Certain factors increase the likelihood that you will need to obtain your own health insurance plan, such as:
A young adult of 26 years or more
Young individuals can be covered as dependents on their parents’ health insurance policy until they become 26 years old, thanks to provisions in the Affordable Care Act (ACA) of 2010. They must then look for their own insurance policy.
Unemployed
If you lose your work, you may be eligible to keep your health insurance coverage via your employer’s plan for a period of time under the Consolidated Omnibus Budget Reconciliation Act (COBRA). COBRA is a programme that allows qualifying employees and their families to keep their health insurance coverage at no cost to them.
While COBRA coverage can be extended for up to 36 months (in certain circumstances), the cost of enrolling in COBRA is prohibitively expensive. This is due to the fact that the formerly employed person is responsible for the entire cost of the insurance. Employers typically pay a percentage of their employees’ healthcare premiums.
If a taxpayer loses a job as a result of COVID-19, the government will repay COBRA costs in full as part of the American Rescue Plan. The subsidy will be in effect from April 1, 2021, through September 30, 2021. The subsidy will be paid in advance and is tax-free.
A Part-Time Employee
Part-time work rarely comes with health insurance. A part-time job is any position that needs employees to work fewer hours than what their employer considers full-time, which is 40 hours per week. You must normally enroll in your own health insurance if you work part-time.
Self-Employed
A freelancer or a business owner are both examples of self-employed people. Some self-employed people can join their spouse’s health insurance plan. They must furnish their own health insurance if they do not have it.
A Company Owner with Employees
You may be obligated to provide health insurance to your employees if you establish a business. Even if it isn’t needed, offering health insurance can help you stand out as a competitive employer that can attract competent employees. You will be obliged to obtain a company health insurance plan, commonly known as a group plan, in this circumstance.
If You Retire (or Your Spouse/Parent Retires)
You will most likely no longer be eligible for employer-sponsored health insurance after you retire. If you are under 65 and not disabled, you must acquire commercial health insurance until you reach 65 and can apply for Medicare. In addition to Medicare, many retirees prefer to acquire private Medigap or Medicare Advantage policies to ensure more complete coverage. Some retirees may choose to replace Medicare coverage entirely with a private Medicare Advantage plan.
It’s crucial to remember that Medicare, Medigap, and Medicare Advantage plans are exclusively for you; your spouse, partner, and any dependents are not covered under your plan. If your family was previously covered by your employer’s plan and you retire, your family members may need to enrol in their own insurance coverage.
Dropped by Your Existing Insurer
Although the Affordable Care Act prohibits insurers from canceling or refusing coverage due to a previous condition or a mistake on your application, your coverage may be canceled in other circumstances. It’s also possible that your insurance premiums would rise to the point where you won’t be able to pay it.
Why Should You Buy Health Insurance?
If you’re in one of the aforementioned scenarios and don’t have health insurance, you should enroll in an individual plan as soon as possible. (In 2019, the penalties for not having insurance were eliminated.)
Even if insurance isn’t necessary, you never know when an accident will occur that will necessitate medical attention. If you’re uninsured, even a little broken bone can have significant financial ramifications.
If you purchase health insurance through the Health Insurance Marketplace, you may be eligible for income-based premium tax credits or cost-sharing reductions. The marketplace allows individuals, families, and small businesses to acquire insurance.
The Affordable Care Act (ACA) created the marketplace as a way to ensure that all Americans are covered by health insurance. Many states operate their own markets, while the federal government oversees a national exchange that is open to citizens from all 50 states.
While you may not be able to afford the same level of coverage that your employer would provide, any coverage is preferable to none. You will be prepared in the event of a serious accident or a long-term illness.
Selecting the Most Appropriate Insurance Plan for You
There are various different types of health insurance plans, each with its own set of characteristics.
Health Maintenance Organization (HMO)
A health maintenance organization (HMO) is a business with a structure that enables them to provide insurance coverage to its members through a network of healthcare providers.
Typical HMO features include paying a monthly or annual fee for insurance coverage. HMOs offer reduced premiums because doctors and other healthcare providers are directed to them, but subscribers are confined to a network of doctors and other healthcare providers that are contracted with the HMO.
Preferred Provider Organization (PPO)
A preferred provider organization (PPO) is a form of insurance plan in which medical professionals and facilities offer discounted services to members. Preferred providers or in-network providers are healthcare providers who are members of this network.
PPO plan subscribers have the option of accessing healthcare providers outside of the PPO network (out-of-network providers), however the rates for seeing these doctors are higher.
Exclusive Provider Organization (EPO)
An exclusive provider organization (EPO) is a cross between a health maintenance organization (HMO) and a preferred provider organization (PPO). You can only get services from providers in a certain network if you have an EPO plan. Exceptions can be made in the event of an emergency.
Another feature of an EPO plan is that you may have to select a primary care physician (PCP). This is a general practitioner who will treat you for minor ailments and give preventive care. Furthermore, you normally do not need a referral from your primary care physician to see a specialist if you have an EMO plan.
High-Deductible Health Plan (HDHP)
A high-deductible health plan (HDHP) includes a few distinguishing features. It has a greater annual deductible than other insurance policies, as the name implies. The percentage of an insurance claim that the subscriber covers themselves is referred to as a deductible. Monthly premiums for HDHPs are often lower.
This type of plan is suitable for young or generally healthy people who don’t expect to need healthcare unless they have a medical emergency or are involved in an unexpected accident.
A high-deductible health plan’s final distinguishing feature is that it provides access to a tax-advantaged Health Savings Account (HSA).
Subscribers to HSAs can make contributions that can later be used to pay for medical expenses not covered by their HDHP. The funds in these accounts are not subject to federal income taxes at the time of deposit, which is an advantage.
Consumer-Driven Health Plan (CHDP)
HDHPs include consumer-driven health plans (CDHPs). Pretax monies are used to pay for a percentage of the services that subscribers receive. CDHPs have greater yearly deductibles than other health insurance plans, like other HDHPs, but the subscriber pays cheaper monthly premiums.
Point-of-Service (POS) Plan
Subscribers receive varying benefits from a point-of-service (POS) plan depending on whether they utilize preferred providers (in-network providers) or providers outside of the preferred network (out-of-network providers). A POS plan combines the benefits of both an HMO and a PPO plan.
Short-Term Insurance Policy
A short-term insurance policy fills in any coverage gaps that may arise if, for example, you move jobs and your new employer’s plan does not kick in right away.
It lasts about three months on average. The length of the term varies by state, and you may be qualified for a 12-month short-term plan in some states.
Temporary health insurance, often known as term health insurance, is a type of short-term health insurance. It’s handy if you’re switching jobs, waiting to become Medicare-eligible, or waiting for a plan’s scheduled open enrollment period.
Your spouse and other qualifying dependents may be protected under a short-term insurance plan. However, there is one essential caveat to a short-term insurance plan: prior ailments may disqualify you from coverage in some situations. The definition of a preexisting condition varies by state, but it is typically described as something for which you have been diagnosed or received treatment during the last two to five years.
Catastrophic Coverage
Catastrophic health insurance is a form of policy that is usually only accessible to people under the age of 30. To be eligible, the government must grant you a hardship exemption. Premiums for catastrophic health insurance are often lower than for other types of health insurance.
These plans are for people who can’t afford to pay a lot in insurance premiums every month but don’t want to be without coverage in the case of a major accident or illness.
While catastrophic health insurance plans may have cheap monthly premiums, their deductibles are often the highest.
Choosing a Deductible
After you’ve settled on the best type of plan for you, you’ll need to figure out how much of a deductible you can afford. This is the predetermined amount that you pay for covered healthcare services before your insurance plan begins to reimburse you.
What is the maximum amount of out-of-pocket medical expenses you can afford each year? The larger your deductible, the lower your monthly payment will be with most health insurance policies. If your monthly financial flow is tight, a greater deductible may be necessary.
Another important factor to consider when choosing an insurance plan is the out-of-pocket maximum. Your health plan will cover the entire cost of approved benefits once you’ve spent this amount on deductibles and medical services through co-payments and co-insurance.
How Much Does Private Health Insurance Cost?
While many people are frightened by the notion of buying their own insurance rather than enrolling in an employer-sponsored plan, studies have shown that it can actually be more economical.
According to a survey by the Kaiser Family Foundation, the average monthly premium for individual coverage through an employer-sponsored insurance plan in 2019 was $603. The cost of family coverage was $1,725 per year.
In contrast, according to the Kaiser Family Foundation, the average cost of individual health insurance outside of an employer-sponsored plan was $440. The average monthly premium for families was $1,168.10.
You may also be eligible for a Cost-Sharing Reduction subsidy and Advanced Premium Tax Credits if you purchase coverage through the Health Insurance Marketplace. These can help you save money on your premium payments, your deductible, and any co-payments or co-insurance you owe.
Where Can I Purchase Private Health Insurance?
When it comes to purchasing private health insurance, you have various options.
Medicare.gov
You can start on the Medicare website if you are (or will be) retired. It’s a good idea to look at what the regular Medicare plan covers first and then look at Medigap and Medicare Advantage policies as choices for supplementing Medicare.
When contemplating Medigap or Medicare Advantage coverage, it’s critical to understand how both types of coverage interact with traditional Medicare.
HealthCare.gov
The Health Insurance Marketplace was established in 2014 as a result of the Affordable Care Act. You may learn more about the health insurance coverage alternatives available in your area by visiting the Health Insurance Marketplace website. You can also see if you are eligible for any subsidies and apply for them.
There is a defined open enrollment time in the marketplace. Every year, it runs from November 1 to December 15, though certain circumstances may cause the open enrollment period to be prolonged or reopened.
Information regarding private plans that can be purchased outside of the marketplace can be found on the website. If you buy a plan outside of the marketplace, whether during open enrollment or not, you will not be eligible for any of the Affordable Care Act’s subsidies.
Even if it is outside of the authorized open enrollment period, an individual may be qualified to purchase a healthcare plan through the exchange in certain situations. This is referred to as a Special Enrollment Period (SEP). If you have a household change, such as getting married or divorced, having or adopting a child, a death in the family, moving, losing your health insurance, being in a national disaster, or experiencing a disability, you may be eligible for a Special Enrollment Period.
The American Rescue Plan of 2021 enhanced subsidies for ACA plans for low-income Americans while also expanding subsidies to encompass some at higher income levels.
Private Health Insurance Companies
You can examine available options on the websites of major health insurance providers in your area based on the type of coverage you like and the deductible you can afford to pay.
The sorts of plans offered and their premiums will vary depending on your age and the location where you live. It’s vital to remember that the plan price listed on the website is the lowest available pricing for that plan and is based on the assumption that you’re in good health. You won’t know how much you’ll pay per month unless you apply and disclose your medical information to the insurance carrier.
Depending on the health insurance company, the cost, and type of coverage can vary greatly. As a result, comparing the plans to see which business offers the greatest combination of rates and coverage might be challenging. It’s a smart idea to figure out which plans give the most of the features you want while staying within your budget, and then check customer evaluations on those plans.
If you’re choosing a family plan or an employer-provided plan, you’ll want to think about the requirements of those who will be covered under the plan.
Important Considerations When Choosing a Plan
Health insurance plans come with a wide range of benefits. While it may be difficult to locate a plan that includes everything you want, think about which of the following qualities are the most important medically and financially. When researching plans, consider the following questions:
- Is prescription medicine coverage included in the plan? Is it limited to generic versions of prescription medications? What is the cost of a co-payment (also known as a co-pay) for generic and brand-name drugs? If you’re already taking medications, make a list of them.
- What is the co-payment for office visits, and does the plan have a limit on the number of visits it will cover each year?
- How much does it cost for specialty services like X-rays, lab tests, and surgery? What about a trip to the emergency room?
- Do you want to be able to add vision and dental coverage to your plan?
- Do you require maternity benefits?
- Do you already have a favorite doctor? If this is the case, you should look for a plan that includes your doctor as part of the insurance company’s provider network.
- Do the annual and lifetime maximum benefits apply? The Affordable Care Act essentially abolished lifetime and annual maximums for critical medical services, but this does not include, for example, dental and vision coverage.
- Is preventative treatment, such as an annual checkup, covered by the plan for free or at a reduced cost? Most ACA-compliant insurance includes most preventative care treatments for free. It’s possible that short-term insurance plans and catastrophic coverage won’t be accepted.
- Is specialist care, such as physical therapy, chiropractic, and acupuncture, covered by the plan?
- Which hospitals are part of the network?
- What are the costs of out-of-network services for PPOs, if you desire or need them? Is this something you can afford?
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FAQs
When will I be able to purchase private health insurance?
You can sign up for private health insurance during an open enrollment period for most types of health insurance. This is true whether you purchase insurance through your state’s Affordable Care Act (ACA) health insurance exchange, sign up directly with the insurer, enroll in a plan offered by your employer, or enroll in Medicare.
A special enrollment period may be triggered by certain life events, allowing you to modify your health insurance coverage outside of the regular enrollment period. Getting married or divorced, having a baby, losing your job-based health insurance, or relocating out of your health plan’s service region are all examples of these events.
What is the cost of private health insurance?
In 2020, the average monthly cost of health insurance in the United States was $456 for an individual and $1,152 for a family. 14 However, the cost of healthcare varies greatly based on your needs, where you reside, and the type of coverage you require.
Where can I purchase private health insurance?
The Health Insurance Marketplace, established by the Affordable Care Act in 2014, is a fantastic location to start shopping for coverage. On your state’s marketplace, you can examine the details of private health insurance policies and compare their costs and advantages. Use HealthCare.gov if your state does not have its own marketplace.
Final Thoughts
Obtaining your own health insurance policy is more difficult than enrolling in an employer’s plan, but you do have some choice over the plan you receive. Your research will become easier if you’ve determined what you need and are familiar with the terminology used to describe health insurance policies. With so many possibilities, you’ll almost certainly be able to choose a plan that matches both your demands and your budget.
A special enrollment period may be triggered by certain life events, allowing you to modify your health insurance coverage outside of the regular enrollment period. Getting married or divorced, having a baby, losing your job-based health insurance, or relocating out of your health plan’s service region are all examples of these events.
