There are more than 70 million people in the United States that are without health insurance or who are underinsured. This is either because their employer does not offer health insurance or they can not afford to buy private health insurance. Private health insurance is a type of insurance that individuals can purchase on their own. You do not need to belong to a group to purchase private health insurance. Private health insurance can help individuals and families pay for healthcare costs. Monthly premiums are paid by the individual and a deductible usually has to be met each year. When you purchase your own private health insurance plan you will also be able to keep it if you change jobs or move as long as your premium payments are kept up.
Leaving a job with benefits is one of the hardest financial decisions most people ever make. Employers usually help subsidize health insurance as well as provide lower premiums as a result of grouping. Getting similar coverage privately may cost several times more than it did through an employer. One of the biggest differences too, is that employer provided insurance is given to employees at a fixed monthly price and is rarely set on your own personal traits or healthiness. Thus, an unhealthy 55 year old worker may pay as much for coverage as a healthy 25 year old employee. In the private markets, however, the younger and healthier employee would be far less costly to insure since he or she comes with a lower level of medical risk.
What to Expect
Before going off on your own private insurance hunt take a deep breath. You’re likely to see expensive monthly payments, higher copays and generally fewer benefits. Also, your deductibles will likely be far higher, as well. Also, since you, not human resources, are comparison shopping, expect a residual headache while you crunch the numbers. Set your standards low and know what to expect, otherwise you’ll likely walk away the first time you see the monthly premium rate card. Mentally preparing is just one step of the process.
You should give yourself enough time to make an informed decision about your coverage. If you’re contemplating leaving your current employer to start your own business or become a contract worker, give yourself enough time so that you’ll have coverage through your employer or with gap coverage. In that time you can keep searching for other insurance.
Types of Plans
There are basically 3 types of private health insurance plans that you can buy. These are managed health care plans (HMOs), preferred provider (PPOs) health insurance plans and indemnity health plans. If you purchase a private health insurance that is an HMO plan you will be able to get quality care at affordable prices. You’ll have a small co-payment and will go to a doctor who is a member of the HMO medical group. With an HMO private health insurance plan you may not be able to get all services covered and will have to pay out of pocket for some things like a visit to the chiropractor. On the other hand, a PPO plan will give you maximum flexibility in controlling your medical care decisions. With a PPO plan you can go to the doctor of your choice. There is a deductible amount that has to be met as well as a co-payment for services.
Indemnity health care insurance plans are not as popular today as they used to be. With this kind of health insurance plan the doctors who participate in the plan agree to charge a discounted price for their services. After a set deductible patients agree to pay a set percentage for services rendered. A private indemnity health insurance plan is generally the most expensive kind of health insurance you can buy. The advantage is that you can go to any doctor you want and any hospital you want as long as they are a member of the plan. However, some indemnity health insurance plans do not cover pre-existing conditions and you can be rejected or denied insurance.
Getting a Quote
Shopping for health insurance will require that you know your own health history quite well. You’ll have to indicate things like smoker or non smoker, and any current or previous medical conditions or diseases. These factors are crucially important to your insurer, since your medical history has a large impact on your future health, and the risk they assume in insuring you. Unfortunately, pre-existing conditions will bring about extremely expensive premiums. While US based insurance companies are now required to offer insurance to everyone, they do not have to do it inexpensively. For more expensive, full-coverage options, you might need to get a physical so the company can confirm your current health. If you can, look to purchase insurance from the same insurance company as your employer policy was through. This might help in the continuity of coverage and keeping records together.
COBRA insurance, offered by the government, is federally required to be provided after you leave an employer. This insurance has to be similar to your previous insurance, though your premiums won’t be. While your employer is required to offer this insurance, they do not subsidize the cost, thus the full brunt of your previous insurance will be thrust on you. Without ample savings, this can be a bit of a budget buster.
Costs of Benefits
On average, those who buy private health insurance spend nearly five times more in out of pocket expenditures than do those who purchase through their employer. As of 2007, private health insurance cost the average user nearly $300 per month, where employer provided care came in at just under $60. The difference may be made up slightly be differences in average coverage, though all in all it has mostly to due with an employer’s generosity in covering health care coverage for their employees. Prepare to get down and dirty, get multiple quotes, and never be afraid to negotiate. You just might get your way, and that discount you so badly wanted.
Purchasing private health insurance will give you the freedom to choose a plan that will fit your specific needs. Individuals can choose the level of coverage they want. Most private health insurance plans will allow you to add coverage or drop coverage that you do not want. You may also be able to choose your deductible amount and co-payment amounts. The various private health insurance plans will have several options to choose from. Choosing a higher deductible can lower your premiums in most cases.
One major disadvantage to private health insurance is the fact that customers can be denied coverage if they already have pre-existing conditions. Premium amounts are also based on the age of the individual and do go up as one grows older. You may also have to add on coverage for certain treatments like maternity. When shopping for private health insurance providers you can start by looking online. It is easy to compare providers and policies if you use the internet. You will have access to all of the major private health insurance providers on the internet. If you purchase private health insurance online you can save as much as 40%. This is because there is no middle man to deal with.