Are individual health policies worth the money?
For decades, the majority of people that had health insurance received it through their employer, but recently this trend has started to change. Today, many people, even those that can receive health insurance through their employer are choosing to purchase their own individual plan. No matter how much the plan costs, paying for health insurance will never cost as much as unexpected medical costs.
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Many factors determine why someone would choose to buy their own coverage. Sometimes the person does not have any other option, but for those that do, it can be a very difficult decision to make. Organizations such as the Agency for Healthcare Research and Quality offer great information that can make the decision a little easier.
Why would someone that has employer health insurance options still buy their own health insurance?
While one of the main perks for many people to have a traditional job are the benefits many employees today are choosing to forgo their employer’s health insurance coverage to purchase their own independently. There are several reasons why employee might choose this option.
One of the main reasons someone would choose to purchase their own health insurance policy is because many employers today are choosing not to offer health insurance. Health insurance can be very costly and in these hard economic times when every penny counts, businesses, especially small businesses are just not offering health insurance.
Some larger businesses only offer health insurance to full time employees. Someone that works less than full time would not be eligible for health insurance. In these cases, the employee would have no other choice than to purchase their own health insurance.
Some people choose not to sign up for their employer’s health insurance coverage because they prefer to have a more personalized plan. By buying a health insurance plan that is specifically designed for them a person can make sure they are not paying for any coverage they do not plan to use.
A great example of this is maternity coverage. Many employers do not make this coverage optional for their female employees; it is just part of the package. Maternity coverage can be expensive and if a woman cannot or just does not want to have children, it is an unnecessary expense.
What types of people without an employer health insurance option choose to buy their own health insurance?
The majority that fall into this category are the self-employed. Thanks to advances in technology, specifically the Internet, more people can work independently from home today than just a couple of decades ago. These people have no choice but to purchase their own plan.
Another group that might have to buy their own health insurance is those that are in between jobs or certain stages in their life. Many health insurance providers now offer short-term health insurance plans, as a way to help those is transition. Someone that has retired, but is not yet old enough to enroll in Medicare would benefit greatly from this type of health insurance plan.
What are the different types of individual health insurance?
There are four main types of health insurance plans. These four types of plans are:
- Health Savings Accounts
- Fee for Service plans
An HMO is one of the most common and affordable health insurance plans. With this type of plan, each individual HMO has their own network of doctors and hospitals that the policyholder can go to and still be covered by their health insurance. Many people do not like this type of health insurance plan because they want to be able to go to whatever doctor they choose.
For those that want to have the freedom to choose their own doctor they can choose a PPO health insurance plan. This type of plan lets the policyholder choose their doctor, hospital, and even specialists. This type of health insurance plan tends to be a little more expensive than a HMO plan.
A Fee for Service, or FFS, health insurance plan is the most basic type of health insurance plan. With this type of coverage, policyholders go to the doctor and pay for it themselves. They are then reimbursed by their health insurance provider for a percentage of the medical costs.
A Health Savings Account is part savings account and part high deductible health insurance plan. Since this plan has a high deductible, it has very low monthly premium payments.
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