Choosing the Best Individual Health Insurance for you
There are many different kinds of insurance plans and choosing one that meets your personal needs can be overwhelming.
There’s a lot of industry-related jargon that makes understanding what you’re looking for trickier—particularly if you have to get the best individual health insurance on your own, instead of through your employer.
What is private health insurance?
Private health insurance plays an increasing role around the world, especially in the U.S.
According to the U.S. Census Bureau, most Americans are enrolled in a private health insurance plan.
Now by definition, private health insurance, sometimes referred to as an “off-exchange” plan, pertains to any health insurance coverage that is offered by a private entity and not by a state or federal government. Insurance brokers and companies are examples of organizations that fall into this category.
There are private health care insurance plans that offer benefits that meet the minimum essential coverage requirements of the Affordable Care Act (also known as Obamacare). Others offer different benefits, such as short-term or catastrophic coverage.
There are several options for enrolling in a private plan, such as:
- Through licensed agents
- Through health insurance offered by an employer (such as a group health plan)
- Through federal or state marketplace plans
Types of Private Health Insurance
Private health insurance comes in various types.
There are five types of common health insurance plans that you can choose from if you are getting from a private insurance company. Read on.
High-deductible health plans (HDHPs)
HDHPs are a type of private health insurance plan where you can have a higher deductible but lower premiums.
With a higher deductible, you need to deal with higher health care costs before your insurance coverage kicks in. This can result in costly medical bills, which is why they are only ideal for people who do not seek health care services often.
HDHPs are referred to as “Consumer-Directed Health Plans” when they are paired with a Health Savings Account (HSA).
However, you need to take it into careful consideration especially if you have a chronic illness and you’re thinking about enrolling in an HDHP.
It can be difficult to pay upfront all of the out-of-pocket costs at one time if you are on specialty medications, have a complex treatment plan or need to see specialty doctors often.
Preferred Provider Organizations (PPOs)
A PPO is a type of private health insurance plan, which you can access both in-network and out-of-network care without needing a referral.
The downside is that you need to pay a higher amount when you use an out-of-network provider and these out-of-network costs can sometimes be considerable.
Point-of-service plan (POS)
A point-of-service plan is a type of private health insurance plan, which will require you to present a referral from your primary care provider when you need to see a specialist. Additionally, POS also has some coverage for out-of-network care, but with higher-cost sharing.
Health Maintenance Organizations (HMOs)
An HMO can provide insurance coverage for its subscribers through a specific network of healthcare providers. Typical features of an HMO include paying for insurance coverage on a monthly or annual basis.
Premiums tend to be lower for HMOs because health providers have patients directed at them, but the disadvantage is that there is no out-of-network coverage with them.
Exclusive provider organizations (EPOs)
An EPO is a type of private health insurance plan, which only lets you access in-network care. You usually do not need a primary care provider or a referral to see a specialist with an EPO. There is no out-of-network coverage as well.
On the other hand, there are also types of private health care insurance according to your enrollment:
- Enroll in a group plan via an employer
- Select your private plan through licensed agents
- Pick a plan through the state or federal marketplace
- Enroll in catastrophic coverage if you qualify
- Choose short-term coverage if you are between plans
Why buy the best individual health insurance?
There are various perks and benefits that you can enjoy when you buy the best individual health insurance plan on a private health insurance market.
You have the option to see the prices of plans from several health insurance companies and you get to compare them all at once.
This is something to take advantage of, especially if you live in a rural area where you might have fewer choices.
Some companies have call centers with licensed representatives and health insurance agents who can get back to you immediately and make the process of signing up for health insurance easy to understand.
Most licensed agents from private health care insurance providers specialize in your market, whether individual or family, so they have the credibility and product knowledge that you might not find from a local broker or a person who represents a government exchange.