Would a private medical health insurance plan be right for me?

A private medical health insurance plan may be right for you in certain circumstances, but if you have the option of group insurance that would probably be a better choice. A private health insurance plan is also known as individual insurance. This is insurance for people whose employers do not offer group health policies, or for those who are unemployed.

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Individual, or private, insurance is a good option to have when you do not have access to a group plan, but there are some downfalls to private insurance.  If you decide that you need private health insurance, you should start searching early so that you can make the right choice.

Who should purchase private health insurance?

According to Smart Money, there are a few reasons why one should buy private health insurance. One reason is that you switch jobs and the new employer doesn’t offer health insurance to his or her employees.

Another reason to get private health insurance is if you are starting a business of your own. The third reason is if you lose your job and need insurance for the period between jobs. You may have another reason for searching for private insurance, but those are the main reasons.

What are the options for private health insurance?

One of the things you need to consider when shopping for private health insurance is the different type of plans. These include managed care plans and indemnity plans. When you choose a managed plan, you need to decide among a preferred provider organization, health maintenance organization, or point of service plan. Under indemnity plans, you can choose a high deductible plan, an essential and basic one, or a health savings account.

Of course, you are looking for an affordable private health insurance plan! Each of these plans is confusing. For more details on each one, go to the Insurance Information Institute.

Is private health insurance expensive?

Compared to calculations for group health insurance, individual health insurance is quite expensive. With a group plan, your costs are distributed throughout everyone in the group, plus your employer usually pays a good portion of the premium.

When you switch to individual health insurance, you are responsible for the entire premium.

When you apply for private insurance, the insurance company takes into consideration your past health history and conditions. If you have past or current health issues this will either cause your insurance application to be denied, exclude the health conditions from coverage, or increase your premiums.

There are some cheap individual health insurance companies; certain plans will be less expensive than others but your coverage will be less as well. Make sure you know what your health needs are so that you get the right coverage. Sometimes the more expensive plans will actually save you more money in the long run than a cheap, basic plan.

What are other features of an individual plan?

When you start looking into individual health plans, you will find that higher prices are not the only downfall compared to group plans. Many private health policies will have higher deductibles. This means that you will pay more out of your own pocket before the insurance starts kicking in.

Copayments through private insurance can also be higher than they are through group plans. This is often the case with cheaper plans. You pay less each month to have the policy but if you end up using a health care provider, you end up paying more.

What is COBRA?

If you have recently lost a job that offered health benefits, you probably were offered the opportunity to purchase COBRA. COBRA is a way to continue your group health plan for a certain amount of time.

If you had good insurance with your former employer and you have the ability to purchase COBRA, you may want to do so. It will definitely cost you more than your group plan did. This is because even though your group benefits are continued, you are 100% responsible for the premiums, rather than splitting them with your employer.

With some research, however, you may find that the cost for COBRA coverage is similar to an individual plan but your benefits are better, such as a lower deductible, lower copays, etc. If this is the case, it would probably a smart move to purchase it. If you have lost your job and your spouse works, you may want to see what it would cost to be added to his or her group policy.

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