Individual Health Insurance

If employer sponsored health insurance is not available, or it is too expensive to add on dependents, or is not adequate, you may be able to buy individual health insurance depending on a few factors. Quote and plan information from many individual health insurance companies are available on this site.

insurancebrochure Individual Health Insurance Quotes

There are different plan types. Not all may be available for individual health insurance. The two basic types > are pre-paid and fee-for-service. Fee-for-service types include simple indemnity, PPO, and EPO. Pre-paid may be an arrangement with independent providers or with a specific group of doctors. The pure HMO has a pre-paid structure.

Compare the options carefully because there can be significant coverage and premium differences between companies but they also can be very similar in value. Individual health insurance may not cover as many categories as group health coverage, e.g., maternity, rehabilitation programs, or mental health coverage.

Indemnity Individual Health Insurance:

This is a pure fee-for-service situation. The insurance company pays the fee for the insured's medical service, no prior agreement between the health insurance company and the medical provider. Consequently, there is complete freedom to choose doctors and hospitals and other health providers across the nation. Change providers at any time. Go to any hospital or physician anywhere in the country.

This type of coverage is most like other categories of insurance, e.g., auto insurance or home insurance. When damage occurs, the expenses are paid by the insurance to whoever repairs or replaces what is damaged or lost. With maximum freedom comes maximum cost. The health insurance company is confronted by charges that may be excessive because "insurance is paying for it". The more the health insurance company pays for services, the higher the monthly premium you will be charged for individual health insurance. The health insurance company may try to negotiate what it believes to be an excessive charge. That is more cost and delay. There may be no agreement reached. You may be expected to pay the difference. There is more paperwork because there is no pre-agreed electronic claims protocol. The process is inefficient and this type of coverage is consequently the most expensive.

Health Maintenance Organization (HMO) Individual Health Insurance:
A Health Maintenance Organization signifies a "pre-paid" or "capitated" insurance plan in which the provider is paid a fixed monthly fee for possible future services if needed, instead of an individual charge for each incident of medical service. The monthly payment to the provider remain the same, regardless of how much or what services are provided. The physicians are employed by, or under contract with, the HMO organization which may be a special administrative entity or an insurance company. This form is generally more popular with employer health insurance than individual health insurance.

Preferred Provider Organization (PPO) Individual Health Insurance:
The preferred provider organization is an arrangement between the claims payer and the medical provider to facilitate claims payment. There are codes for each medical service and a pre-agreed payment for each service. This enables efficient electronic claims processing and no need for negotiation over what is a reasonable fee for the service performed. Insureds may go directly to specialists so unlike some HMO's, there is no primary care doctor and no referrals to specialists necessary. This arrangement is called a "network". Out-of-network care is still covered, but copays are usually not available and the deductible and coinsurance is higher than in-network. This is the most common individual health insurance.

Point-of-Service (POS) Individual Health Insurance:
Point-of_Service plans combine an HMO with pure indemnity health insurance. The insured can choose either to go to an HMO provider or to any physician or hospital or other medical provider in the nation. There is higher out-of-pocket expense to the insured if the choice is made to go outside the HMO network. The monthly premium is typically higher for a POS plan than an HMO plan with similar HMO benefits.

Health Savings Account (HSA) Individual Health Insurance:
Health Savings Accounts (HSAs) are actually bank accounts, not insurance plans. The right type of coverage qualifies the insured under the tax code to be entitled to open a health savings account. Contributions to the health savings account are tax deductible. So the individual health insurance plan is a "qualifying" or "qualified" plan, i.e., it qualifies under the tax code to allow the opening of the bank account. Payment for medical and other expenses can be made out of the account, if desired. However, the tax deduction is for contributions, not for expenses paid out.

¶ Nothing here constitutes advice or recommendation of any nature, whether legal, tax, financial planning or otherwise. The comments above represent only the author's understanding of health insurance and may be incorrect or out of date.

Individual Health Insurance