Shop for Individual Health Insurance

Have you ever considered individual heatlh insurance as a coverage option or as an alternative to group health insurance?  If not perhaps you should.  For many people the overall expense can be far less than the cost of group health insurance.  If this is something you are interested in looking in to, the intent of this article is to provide some sensible guidlines to make your shopping experience go smoothly.

How is individual health insurance different from group health insurance?

Individual health insurance is different from group health insurance and serves an entirely different purpose.  Group health insurance which is most people's point of reference when it comes to health insurance, frankly, is intended to attract and retain qualified employees.  That is why it is not uncommon for an employer to pay 50 percen or more (as mandated by law) of the health insurance premiums of full time employees.  To illustrate this, imagine that you were looking for a job and you received two offers.  Everythig between the two companies under consideration was nearly identical except one offered benefits and the other one didn't.  Which one do you think you would be more likely to choose?  This is one of the reason why employers offer health insurance.

What is the purpose of individual health insurance?

The purpose of individual health insurance, if you're paying for the full cost out of your own pocket is for an entirely diffrent purpose and that purpose is one thing and one thing only: to protect your assets.  That is it.  Most people make the mistake of buying more individual health insurance than they need or makes any kind of arithmetic sense.  People feel that if they're paying for health insurance doctor's visits should be covered.  People who never go to the doctor get especially angry when they finally get around to going and their insurance doesn't pick it up so they'd rather spend an extra $1,000 a year even though they only go to the doctor once every two years on average.  If possible, avoid the mistake of spending down your assets to pay for health insurance premiums.  Most people with an individual health insurance plan should strongly consider a Deductible of $2,500 or higher, and should also consider getting an HSA.   I digress...

Using the internet to shop for individual health insurance

The best place to start shopping for health insurance is online of course which is why you are here.  There are many sites which provide instant quotes from every reputable health insurance carrier located in the region or state.  But it's still a good idea to talk to an agent or even a few agents.  Be upfront and courteous with them about your search for health insurance and be honest with about your level of interest and time line.  Most agents will respect that you are in the "looking around" mode.  It can be helpful to speak to more than one agent to ge a full perspective on what might be a significant financial commitment.  Additionally, agent's who specialize in individual health insurance will be able to tell you about various things you will never hear if you buy your policy directly from a carrier.  These things might have to do with underwriting guidlines or they might have to do with how a particular health insurance company is when it comes to paying providers and claims. 

You might also want to call the billing department of the places you receive or have recieved medical treatment in the past and ask them which health insurance company is easiest to work with.  All things being equal, go with the company which the billing company has the least amount of trouble with.  There is a better chance in this case that other departments will work as smoothly.

Another place that people look to assess the possible quality of a prospective health insurance company is the rating it has received from various rating organizations like A.M. Best.  Many people mistakenly believe that a high rating by one of these organizations has something to do with a companies willingness to pay claims.  The only thing an A.M. Best rating has to do with is a companies ability to pay claims which has to do with a companies financial solvency.  It is certainly good to have a health insurance policy with a company which has a demonstrated and recognized ability to pay claims but just don't think it will make them any more likely to do so over the next company with a lower rating.

The least you should know

After you have called a few insurance agents and perhaps received a few quotes, it's important to understand how to interpret all of the information you're collecting.  Here are some of the most important things:

• Deductible - this, above everything else, will determine your monthly premium.  The higher it is the less you will have to pay.
• Prescription drugs - there are many sub categories within this general category but there is basically brand name drugs, generic drugs and injectables. 
• Co-insurance - after you are done paying your deductible, most plans require you to cost share a certain percentage of the remaining bill up to a certai amount. 

You will also want to make sure that you are not buying a plan that only pays scheduled benefits.  These plans will only pay a certain amount of money per day and are capped by all kinds of limits.  There is nothing secretive about how these plans work (it's all spelled out in the policy) but the people who sell these plans nevertheless take advantage of the fact that most people don't have the time or inclination to really understand health insurance.  IF someone tries to sell you individual health insurance from a company you've never heard of, be very, VERY careful.