Tuesday, May 13, 2008

Tips for buying individual health coverage

There's strength in numbers, particularly when you're buying health insurance. As part of a group plan, you can enjoy a significant discount on premiums as well as comprehensive policies.

But if you leave that job — or start another one that doesn't offer health insurance — you may be surprised at just how expensive the same coverage is when you buy individual health insurance. ("Individual" means the insurance is not connected to a business or to the self-employed. You can purchase an "individual" policy that covers your whole family.)

In addition, there is no guarantee that an insurer will take you on. Individual plans are medically underwritten and the insurer may reject your application or attach exclusions to your policy if you have health problems. However, some states don't allow this practice and require that any insurer selling individual health plans must offer you a policy, no matter what medical problems you have.
However, your premiums are still likely to be substantially higher. People enrolled in individual plans pay premiums more in line with their expected health costs, so the premiums will be higher for those who are older or less healthy. To find out what your rights are, contact your state insurance department. You can find the contact information by selecting the state in which you live from the pull-down menu at the top of this page.
Crunching the numbers

Pricing is probably the most bewildering aspect of individual health policies, so it's worth your while to shop around. For instance, the premiums for similar products from different insurers can vary by as much as 50 percent for the same person. What's more, the rules and regulations about individual health insurance vary from state to state, making comparison-shopping difficult for the consumer.
If you're faced with finding individual insurance, don't let the confusion tempt you to go without. Even if you're healthy, you could fall off a ladder or have a serious car accident and be financially ruined. Plus, you'll lose your pre-existing-conditions coverage in most states if you go without insurance for more than 63 days.
Finding the right balance of coverage and cost can be challenging, but it's a necessity. So take your search one step at a time. The first step is to evaluate your needs and understand your health insurance options. For some, that may mean buying COBRA coverage from their former employer.

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