Our Top Unbiased Tips to Buying Individual Health Insurance
Buying individual health insurance is no walk in the park. If you have done it before, then you are probably worried about the next time that you will need to find insurance or that your premiums are about to go up again.
If you have never shopped for your own, you need to prepare yourself for some hard work and some steep prices.
These prices are the reasons that many employed, healthy Americans go without health insurance. They just cannot stomach paying so much money just for the privilege of having insurance. This is probably not the path that you want to take.
If you have been working for several years now and have already had insurance, then you probably know that you always ending up needing a policy.
The good news is that working hard at finding the right insurance policy can save you a lot of money in the long-term. You just need to keep a few guidelines in mind while you are buying insurance. You also need to remember the things that are most important to you about your health and your coverage.
A Word About COBRA
If you have recently left a job, which covered your health insurance, you should have received an offer for coverage under the COBRA plan. This is a government act from the 1980’s, which requires companies to continue offering insurance coverage to employees after they have left employment.
However, this legislation does not require the company to continue paying the premium. If you can get COBRA instead of buying individual health insurance, you should take it. The premium will be high, but the same price in the individual market will not buy you nearly as much coverage.
What You Need to Understand Before Buying Private Health Insurance
- State Regulation
The states regulate the health insurance companies operating within their borders. IN some states, insurers are required to offer coverage to everyone who applies for a policy, regardless of their present health or their age. This only sounds good at first.
The premiums in these states are high across the board because these insurance companies have to charge all their clients a higher rate since they will certainly take losses on the sick or injured clients that they enroll. A single, young and healthy man may have to pay almost $1,000 per month for a decent policy.
In states where companies are not nearly as regulated, people buying insurance can find themselves rejected outright. Or they may offer you coverage at a rate higher than other clients pay because you have pre-existing conditions. This experience can be especially jarring for someone who is used to group coverage through their employer, which automatically covers all employees.
- High Premiums
The rates that you pay when buying individual insurance are far higher than those paid under group plans. You should be prepared for a very high premium for coverage that may seem insignificant if you were previously covered under a group policy. In 2007, the average employee in the US paid less than $60 per month for health care coverage.
Their employers paid, on average, nearly $3,800 per year for that employee. When such employees find themselves buying individual health insurance, they can expect to pay more than $200 a month.
These numbers represent an average employee. If you have a family, you can expect to pay much more for a similar policy. It is not uncommon for people with families or health issues to pay close to $10,000 per year in health insurance premiums.
If you are a woman and you are planning to have a child in the future, you will have to make sure that your policy includes a maternity rider. With employer-sponsored plans, these are usually automatic but buying individual health insurance means that you will have to pay extra for this coverage. Additionally, you may have to pay for the policy for a certain number of months before a pregnancy will be eligible for coverage.
Three Questions To Ask When Buying Insurance
- Will They Cover You?
Depending on state regulations, the insurance company may be able to deny you because of some pre-existing condition. If you are healthy, you probably have little to worry about and you can look forward to the best premium that the company offers. If not, they may either charge you a bundle or simply refuse to offer a policy.
- Will the Premiums Be Affordable?
You can make your premiums go up or down by altering the amount of coverage and by raising or lowering your deductible. In general, you should not try to match the deductible that you had with an employer if you recently had group coverage.
If you do not like the size of the premium that the insurance offers, try experimenting with the coverage and the deductible to see what lowers the price sufficiently for you. Many people approach buying individual health insurance with a philosophy that considers insurance for accidents and not for maintenance.
If you raise the deductible and commit yourself to saving insurance for disasters rather than for regular check-ups, you could make the price a little more comfortable for yourself.
- Will The Policy Cover What You Need?
Before you make any final decision, make a list of issues that you need covered in your life. If you have a pre-existing condition, you need to know ahead of time if that is covered by your insurance. At the same time, make sure the policy does not include extra coverage that you do not need.
Companies bundle their policies and have been known to include maternity coverage for men, incidentally bilking them out of a lot of money that they never needed to spend.
Things to Beware Of Before Getting Insurance
When you are looking for health insurance, make sure that the insurance covers catastrophic illness and injury. Insurance companies have been known to draw people in with low premiums that do not actually cover very much. Before buying insurance, inquire to determine that the premiums will not rise for the next 12 months.