The Basics of Picking the Best Individual Health Insurance Plan
Many times, if you have health insurance, it’s through a group plan provided by your employer or your spouse’s employer. Others buy individual health insurance policies directly from an insurance company or have COBRA coverage. Some persons have no coverage at all, which can potentially be problematic for your finances.
If you are married, single, have children, young, or old, you require some level of health insurance to protect yourself against financial disaster in the event of a severe illness or accident. Whether you select the best individual health insurance, there are important choices that will affect not only the quality of your medical care coverage but also your wallet. Reviewing some of these options can help you make an informed decision that fits your specific needs and budget.
Types of Individual Health Insurance Plans
There are quite a few confusing terms to weed through when considering individual health insurance plans, and they all come with their impacts to consider. While it is vital to know the difference between HMOs, PPOs, POS Plans, and Indemnity plans, for example, it is most helpful to start with the most popular health insurance plan types. The most common types can be categorized into one of three categories:
Indemnity or Fee-for-Service Plans
Traditional plans that enable you to go to any doctor or specialist you select without a referral are called indemnity, fee-for-service, or point of service (POS) plans. With these plans, the insurance carrier will pay for a set portion of your expenses and pay the rest. These plans offer the most flexibility as they do not set restrictions on the providers you can use and usually do not require that you choose a primary care physician (PCP).
Health Maintenance Organizations
An HMO is an association of healthcare specialists and medical facilities that sell a fixed package of health care services for a fixed charge. Within an HMO insurance plan, every patient has a primary care doctor, who is often referred to as a gatekeeper. This individual health insurance plan does not cover services offered by a specialist unless the gatekeeper (PCP) determines that the specialist is necessary and issues an in-network referral.
Preferred Provider Organizations
A PPO contains the managed care aspect of an HMO but with the added flexibility of being able to go outside the network of healthcare specialists and facilities to any health care provider of your choice when you feel it is necessary. When you go outside the network, your advantages are less, and you pay more out of your pocket than you would if you had stayed within the system, but you do still receive some coverage (unlike an in an HMO). If flexibility and choice are beneficial to you, a PPO may be a good option if it’s available to you.
Where Can I Get Individual Health Insurance?
Most individuals get their health insurance through a group plan sponsored by their employer or a spouse’s employer. But many small employers do not provide health insurance. If your company is one of them, you can get group insurance through membership in a labor union, professional association, club, or other organization that provides health insurance to members.
If you are unable to find group coverage, you can purchase individual health insurance, which in the past was very cost-prohibitive for many. One of the major objectives of the Affordable Care Act—also called ACA and Obamacare—was to overhaul the health insurance market and make individual plans affordable.
You can now search through the ACA’s health insurance exchanges—called marketplaces—through HealthCare.gov, where you can explore and compare policies and see if you are eligible for any subsidies. You can still opt for affordable individual health insurance plans provided directly from an insurance carrier or an agent or broker.
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