Individual Health Insurance - Explained

Not everybody has health coverage through their job.

This is where buying individual health insurance comes in. Individual health insurance is coverage that you purchase on your own, on an individual or family basis, as opposed to obtaining through an employer. Individual health insurance can be purchased through the exchange, or off-exchange (directly from the health insurance carrier).

If you’re a young adult of 26 years of age or older, unemployed, a part-time employee, or self-employed – even retired – individual health insurance can be essential. Even a broken bone can have serious consequences on your finances without coverage. It would be prudent to have at least the bare minimum coverage available for accidents, or long-term illness.

Should you purchase health insurance?

The short answer, Yes!

Literally everyone should purchase health insurance because medical expenses are simply too high to cover out of pocket without coverage. Medical bills have been identified as a leading cause of consumer debt and related financial problems (e.g., bankruptcy and home foreclosure).

If you are purchasing health insurance and you belong to one of the following groups, we have provided a few additional considerations to keep in mind while shopping for health insurance.

Buying for A family

You should be aware that your plan may have a family deductible in addition to individual deductibles for each family member. Individual deductibles are lower than the family deductible. Once an individual hits their individual deductible, their health insurance plan kicks in just for them. But once the family deductible is met, health insurance kicks in for every member of the family, regardless of whether or not an individual has reached their deductible.

Something else to be aware of is the aggregate deductible versus embedded deductible:

Under an aggregate deductible family health insurance plan, the total family deductible must be paid out-of-pocket before health insurance starts paying for the health care services incurred by any family member. With an aggregate deductible, there is no embedded deductible for each individual family member to meet

When HSA plans were first introduced in 2004, IRS publications used the term “embedded deductible” to refer to the individual deductible within a family plan in which an individual family member does not have to meet the higher family deductible if he/she has met the lower individual deductible. Current IRS publications do not use the term “embedded deductible.”

Students

Good things to know

You can maintain the coverage on your parent’s health insurance until you’re 26 years old, so no need to buy health insurance if your parents are willing to let you stay on their plan unless the cost of doing so is higher than alternative options available to you; through an employer or individual health insurance plan. You can also check your University for health insurance plans, which may be more affordable. This is an especially good option if you are attending college/university out of state, as your parent’s plan’s network may not function properly in your state.

Self-Employed

If you just became self-employed after leaving a full-time W-2 job, you can utilized COBRA to continue your previous employer’s coverage giving you time to find a new plan as long as the employer’s coverage is still active; this option will not be available if the employer terminated the coverage at the group level for all employees. COBRA coverage lasts for initially 18 months and depending on your state there may be additional time available; for example in California it can last an additional 18 months for a total of 36 months.

If it’s not open enrollment, you should also be able to qualify for a special enrollment period to shop on the marketplace.

Make sure your premiums are affordable, as your monthly income may be variable. Your health insurance premiums are also tax-deductible sometimes, so don’t forget that come tax time. Additionally, if you travel frequently, you may want to purchase a plan that allows you to see out-of-network providers, like a PPO or POS plan.

**Special Note COBRA is available for: Covered spouses, domestic partners, and/or dependent children are eligible for continued coverage however only if they were enrolled on the plan.

Low Income

Everyone has access to insurance

If you’re on a low income or tight budget, you should look into whether or not you qualify for Medicaid. Medicaid is a joint federal-state public program available for low income individuals and families.

If your income is between 100% and 400% of the federal poverty line, you likely qualify for a subsidy from the health Insurance Marketplace. This subsidy can help make health insurance more affordable.

The most important thing to remember is to have some sort of coverage in place. A serious health issue can turn into a financial disaster if you’re not careful. If you qualify, look into catastrophic plans; these low cost plans can protect you from the cost of serious illnesses and accidents.

Veterans

If you’re a veteran, you may qualify for health care through the U.S. Department of Veterans Affairs (VA). The Affordable Care Act does not change VA health benefits.

If you have health insurance coverage through a private-sector employer, you can have and use both health insurance plans at the same time.

Mid-Size & Group Insurance

These policies are normally through an employer or association and offer coverage to all eligible persons within the group. After the Affordable Care Act came into being, important reforms targeting plan quality and employee costs were introduced.

Enrolment in group plans was made easier, and because of the pre-tax funding of premiums such plans are cheaper than taking out individual health insurance. There can be multiple plan choices offered, and groups can use their size to negotiate better benefits for life insurance, vision and dental care, as well as long-term and short-term disability insurance.

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Insurance Forms and Applications

As with all things medical involving insurance, the forms and applications are necessarily complicated and involved. It is important to get expert advice when filling these in as an error could result in you not being able to claim the benefit to which you’re entitled. Make sure that the insurance company that you deal with has a good support system which allows you to ask questions and query problems you may encounter with the administration.
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Medicare Supplements

Medicare is limited in its scope. With an ageing population and massive funding issues Medicare tries to cover hospital insurance, outpatient coverage, and prescription coverage. There are huge gaps in the coverage – copayments, coinsurance, deductibles, medical expenses incurred travelling outside of the United States – are amongst the things which are not covered. “Medigap,” as it is known, is designed to fill these deficiencies in your cover.
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Dental

Dental insurance is often covered together with vision insurance in a single plan. Both of these are separate from normal medical insurance. These plans cover emergency care and maintenance – most do not cover cosmetic surgery.

The deductibles on dental insurance can be expensive. It is entirely dependent on the premiums that are paid and there are benefit caps and no limits to your out-of-pocket costs for adult dental care.Paediatric dental care is treated far more sympathetically with limited out-of-pocket costs and unlimited insurance benefits.

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Short-Term insurance

Short-term insurance is used for the millions of people caught in the coverage gap, who have incomes that are too high for subsidies or who missed open enrolment. Do be aware that there are 10 states which do not allow short-term plans.

This insurance can be used in the 14 states who have not accepted federal funding to expand Medicaid, and by people whose household incomes fall under the federal poverty level. If you’re premium is unaffordable and you don’t get premium subsidies you should consider a short-term health insurance plan.

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Life Insurance

Life insurance is one of the most important policies for families and businesses alike. Having your main breadwinner taken from you leaves an immense financial burden which life insurance addresses.

There are many forms of life insurance from fixed term policies, through to whole of life insurance and many variations in between. There are also critical illness policies which pay out the life insurance before death in the event of a fatal illness being diagnosed.

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Small Group Insurance

As the name suggests, these are insurance policies taken out by small groups of individuals to take advantage of the reduction in overall risks, benefits and deductibles. these policies are usually geared towards businesses with 100 or fewer full-time employees.

Often, small group insurance is far more affordable than the equivalent individual policy. This is because the insurance company can negotiate better rates with hospitals, clinicians and other services. There are also legal limits set for premiums – for example premiums for older employees cannot be more than three times those for younger employees.

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Individual health insurance

Not everybody has health coverage through their job. This is where buying individual health insurance comes in. Individual health insurance is coverage that you purchase on your own, on an individual or family basis, as opposed to obtaining through an employer. Individual health insurance can be purchased through the exchange, or off-exchange (directly from the health insurance carrier). If you’re a young adult of 26 years of age or older, unemployed, a part-time employee, or self-employed – even retired – individual health insurance is essential. Even a broken bone can have serious consequences on your finances. You need to have at least the bare minimum cover for accidents, or long-term illness If you are ready to start reviewing options please click the link below if you would like to know more we have provided additional information below:
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