Individual / Family Health Insurance Plans EXPLAINED
Table of Contents
- Individual / Family Health Insurance
- Qualifications and other Information
- How the Individual / Family Insurance Plans Work
- How the Pricing Works
- How to find the Best Plan
- Individual and Family Health Insurance Resources
Purchasing health insurance in the United States is a big deal. Since the US is considered the only industrialized nation in the world to have a privatized insurance business, most individuals and families have to seek out solid plans via private insurance companies if they want any peace of mind when it comes to their health.
There are many different types of insurance one can choose from, and many different packages of various prices. One of the most common types of health insurance in the country is individual health insurance. This title can be a bit misleading, though, because individual health insurance doesn't always cater to one individual.
"Individual" is more of a title - a ranking, if you will. It's also commonly referred to in some circles (companies) as private health/personal insurance. However, this type of insurance is commonly associated with family coverage.
Family health insurance-remember: it's still individual-covers a person's spouse and children on the same plan. So, why is it called individual?
The name has to do with the purchasing more than the care package. Take for example the Canadian health care system. Canada's insurance is referred to as single-payer, because each tax-paying individual in the country contributes money to the health care coffer. It's the same principle with individual health care in the United States. Because an individual pays for it out of his or her pocket, the plan-depending on its specifics-can cover a multitude of people and still be known as individual insurance.
Most of the insured adults and family members in the US have health care packages through their employers. With the employer-based system, health care works more like a universal system - only the "universal" in this context is restricted to the employees in the company receiving the care. They pay in money via taxes are they and their dependents are covered.
Individual health care is what you purchase when you're not employed or if your employer isn't providing you with health care. This type of insurance is ideal for people who are self-employed, students, or even if your employer's package isn't providing adequate care.
Although there are government-funded and state-provided health care options for children (Medicaid and other programs), children can technically purchase individual health care. You do not have to be an adult to sign up and receive family care.
Individual care is also available to seniors up until age 65. Once seniors reach 65 (the country's retirement age), their Social Security benefits kick in and they can take advantage of the Medicare package. Anyone choosing to apply for and receive Medicare must give up their private insurance, however.
Qualifications and other Information
Individual health care varies from employer-based health care in a few ways. It also varies state to state. In the United States, private health insurance companies do not experience the freedom of other insurance companies like auto and home insurance. They must compete within the states they're located, and each state's health insurance providers ultimately have different standards.
It can seem confusing, but there are many universal similarities. For example, individual/family health plans are not guaranteed like employer-based health care. This means, simply, that people must qualify for individual health care and aren't just automatically accepted. Any preexisting condition can exclude you from receiving health insurance.
If you are approved with a preexisting condition, a clause called an exclusionary rider may prohibit funding for care of that condition. So if you get sick separate of your preexisting condition, the insurance will pay, but if it's the condition needing care, you're on your own.
State to state, these terms vary. Quite a few states in the country do not allow companies to reject/neglect based on preexisting conditions. See your individual state's regulations to find out about exclusionary clauses.
However, even in states where they're not allowed to reject payment for preexisting conditions once you purchase health care, you can still be turned down for a condition before signing up. This means there is a rather high rate of rejection in the private industry. You may be viewed as a high-risk candidate and thus be declined.
How the Individual / Family Insurance Plans Work
The plan you purchase will dictate the type of care you receive. There are five primary types of insurance payment structures that you'll need to know some information about before purchasing a package: Fee-for-service, Health Savings Account (HSA), Point-of-service (POS), Preferred Provider Organization (PPO), and Health Maintenance Organization (HMO).
Click here to see all plans available.
Each one of these payments structures is basically how the cost of medical care will be paid via the insurance company, thus plans allowing the freedom to pick and choose doctors, procedures, medicines, etc, will cost more.
It's important to always compare quotes on the types of plans you want. Check out a few different insurance companies before finally deciding which plan is right for you and your family.
How the Pricing Works
Obviously, like with any other type of insurance, the price you pay for a health insurance package will depend on many factors. Premium prices range based on your location, health status, individual lifestyle habits and choices, age, weight, and other factors that may determine the type of care you receive or are likely to receive.
A healthy individual will pay less of a premium price than an unhealthy individual. This part of the pricing is common sense, but it's still important to note that you'll be on the hook for more money if you choose to live a poor lifestyle.
Also, some health insurance companies act more like credit card companies if you're a high-risk person and end up receiving care for you and/or your family. Any individual insurance holder is subject to rate adjustments. This means your monthly premiums could skyrocket depending on the care you've received.
Luckily, however, family insurance cannot be cancelled for excessive claims. The rates may just rise for you. But that's not necessarily good news, either, and if you have any type of payment structure besides an HMO plan, your insurance will have limits that cannot be topped.
For example, most individual health insurance plans (health insurance for individuals) will give you a maximum annual limit and a maximum lifetime limit. These limits are usually high, but they do eventually run out. This means, simply, that anyone incurring costs beyond their limit will find the insurance company unwilling to pay for the treatment. You will essentially be terminated from the policy.
How to find the Best Plan
No one knows the type of coverage you and your family needs but you. All the information in the world is meaningless unless you know exactly what you're hoping to receive from a health care plan.
Do you want the peace of mind that comes with knowing your medications will be provided and that unfortunate long-term sickness won't send you to the poor house if you seek multiple doctors and/or treatments? This is the type of plan that's going to cost the most, because of the actual insurance provided.
Cheaper plans are becoming more popular. Because of the rise of generic medicines and various inexpensive clinics around the country, a lot of people find perfectly adequate coverage in basic plans like HSAs.
However, the onus is on you to do your due diligence and research the best possible plan for the best price. Remember to always check with up-to-date state regulations and compare quotes before purchasing insurance. Also invest some time at looking at a company's track record to see how they handle claims and payments. You don't want to run into any unfortunate surprises that leave you holding the tab.
Individual and Family Health Insurance Resources
State-specific information for all 50 states, including contact information for state offices and insurance programs.
With each passing year, Americans are paying more for health care coverage. Employer-sponsored health insurance premiums have nearly doubled since 2000, a rate three times faster than wages.
Health insurance helps protect you from high medical care costs. Many people in the United States get a health insurance policy through their employers. In most cases, the employer helps pay for that insurance.
There are many things that determine how much your health insurance will cost you each month. How much health insurance will cost you depends on your age, the condition of your health (how healthy or unhealthy you are), where in the country you live, your income, and your job status.