Get Individual Health Insurance (time: a few hours)

Kate Ashford  |  06:53 PM, Monday, February 28, 2011

If you’ve got a job and your employer offers health insurance benefits, congratulations. You don’t even need to read this. But if you’re working part-time, working for yourself, or working for a small company that doesn’t provide benefits (or you’re out of work completely), you’re taking a major gamble if you’re flying without a health insurance net. Here’s how to get some coverage.

This is for you: If you don’t have group health insurance coverage through work, COBRA, a parent or spouse, or a professional or religious organization, and you’re not eligible for Medicaid. Living dangerously: Resisting health insurance because of high premiums

Hands-on time: A few hours to think through what you need and do the online research or speak with an agent. (It may also take time to gather your medical history—unless you’re young and healthy with no particular medical history, in which case, this part will be cake.)

Total time: Up to a week to find out if your application was accepted and to pay your premium.

Cost: Varies. The average single person pays about $2,985 per year (or $249 a month) for coverage, and the average family pays $6,328 (or $527 a month), according to a 2009 report by America’s Health Insurance Plans. (That number may look a little different now that health care changes have started to kick in, but that’s at least a ballpark idea.) The major determinants of cost are your age, geographical location, gender, and health status. (Smokers pay more, for instance.)

What you’ll need: Your medical history for the past two to three years (or at least the last 12 months), including doctors’ names, addresses, and phone numbers. If you’re healthy with no special conditions, the insurer may just need the name of your primary care physician. If you have a pre-existing condition and you’ve seen specialists in the past, you’ll definitely need the names of your past doctors so insurers can verify the information in your application.

What you should know about:
1. Annual deductible vs. monthly premium. Some plans are very affordable but have a high annual deductible — the amount you have to pay out of pocket before your coverage kicks in. If you’re young, in good health, without kids, and don’t see the doctor all that frequently, a higher deductible plan may save you money. If you have chronic health issues or children (or if you’re a woman, actually, because women tend to see the doctor more often), a lower deductible plan may make more sense.

2. Pre-existing conditions:

• Insurance companies currently can accept or reject you based on your health history, or they may issue a policy that doesn’t cover your pre-existing condition for the first year. Starting in 2014, companies aren’t allowed to reject you based on a pre-existing condition, according to current health care act legislation.


• Contact your state insurance department if you are a high-risk case with a pre-existing condition (such as cancer), have been denied coverage by a provider, or have exhausted your group COBRA rights.

What to do:
1. First, get an idea of the type of coverage you need.

• Do you need temporary coverage or long-term? Temporary coverage of one to six months typically covers insurance gaps between, say, graduation and employment, retirement and Medicare kick-in, or for waiting periods on new coverage benefits (such as when you start a new job). Just be forewarned—not every state offers short-term policies.


• Are you looking for basic coverage or more comprehensive coverage? At a bare minimum, you should have catastrophic coverage that covers major medical expenses. (Think: What would happen if you got hit by a truck?) These basic insurance plans typically have a lower monthly premium than plans with more comprehensive coverage, and may be appropriate if you intend to use insurance only in the event of a serious accident or illness.

2. Do your research.

• Refer to the National Association of Health Underwriters for an agent who can help you find coverage or get a broker referral from a Certified Financial Planner (CFP).
• Go to eHealthInsurance.com—the largest online resource for health insurance—and plug in your info. Compare rates.
• Call individual companies for info on their plans. (Top sellers include BlueCross BlueShield/Anthem, Humana, United HealthCare, Assurant Health, and Aetna.)
• Again, call your state insurance department if you are a high-risk case with a pre-existing condition, have been denied coverage by a provider, or have exhausted your group COBRA rights.

3. Compare plans. Ask some questions. (Heck, ask lots of questions.)

• Is your current doctor or hospital part of the plan's provider network? (And do you like him enough to care if he isn’t?)
• Do you need a written referral to see a specialist?
• How easy is it to change doctors?
• Are emergency room visits covered?
• How much is the premium?
• How much is the deductible?
• What is the coinsurance percentage? Plans usually pay 80 percent of major medical up to a certain amount and then 100 percent after that.
• Is there a copayment for services such as doctor visits?
• What is the policy's annual out-of-pocket expense limit? What costs are included and excluded in the out-of-pocket expense limit? Once you've contributed this maximum amount, the insurance company typically covers all other costs for the remainder of the benefit year.
• Look for a lifetime benefit of more than $1 million. (Although, a note: Lifetime benefits should be unlimited under the new healthcare act.)
• What’s covered? At a minimum, hospitalization and major medical expenses should be covered.
• Do you need additional coverage, such as maternity, dental, vision or prescription drug coverage? Also check for coverage that you don’t need—if you’re male, you probably don’t need maternity coverage. (Unless science makes a major leap.)
• Are there lots of exclusions? (What are they?)
• Are there limitations to the policy benefits such as for pre-existing conditions or for specific services?
• Is there a waiting period before benefits kick in?
• What is the insurance company’s rating? As with any insurance coverage, you want to make sure you have a stable, highly rated company underwriting your policy.

4. Apply online or with an agent.


• You will have to fill out an application, provide your doctors’ contact information, and answer some health-related questions.



To learn more:
How to Buy Health Insurance (LearnVest)
How to Buy Your Own Health Coverage (MSN Money)


Did you do it? Tell us what worked or share other tips in the comments below.

Who helped: Elizabeth Gallops, Integrated Benefits Solutions; Ed Gjertsen II, CFP, Mack Investment Securities

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