Indivdual Health Insurance

There can be a great difference between group health insurance and individual health insurance. First, realize that the term “individual health insurance” does not necessarily apply to simply an individual getting his own health insurance. An individual may purchase an individual health insurance policy that covers his entire family.

What is meant by individual health insurance is that this particular health insurance policy is not connected to any business or to the self-employed. Group health insurance differs from individual health insurance in it is the insurance plan offered by an employer to a group of employees.

Several main differences crop up between the two.

As part of a group plan, you may enjoy significant discounts on premiums and comprehensive policies. You do not receive these with individual health insurance. In fact, the coverage for individual health insurance can be much, much expensive than for a group plan. Also, there’s no guarantee that an insurer will take you on for individual health insurance. Individual plans tend to be medically underwritten and insurers may reject your application for individual health insurance or attach exclusions to your policy for health problems unless the state you’re in has a “guarantee issue” law. This means that an insurer must offer you an individual health insurance policy no matter what your health is.

Either way, individual health insurance premiums are likely to be substantially higher. People enrolled in such insurance plans pay premiums more in line with their expected health costs, so the premiums are even higher for the elderly and less healthy.

If considering personal health insurance, shop around. Premiums may differ for similar products from different insurers by as much as 50 percent for the same person. Also, the rules and regulations regarding individual health insurance vary from state-to-state.

All the confusion should not stop you from getting individual health insurance since you’re better off with it than without. You never know if you’ll be in a car accident tomorrow. Not to mention that you lose your pre-existing-conditions coverage in most states if you go without insurance for more than 63 days, an interval set by the Health Insurance Portability and Accountability Act.

Before going shopping around for individual health insurance, you need to assess your own insurance needs first. This will help you cut through much of the confusion and get to a provider that’s right for you.

In the meantime, you may be able to get COBRA (established by the Consolidated Omnibus Budget Reconciliation Act of 1985). This means that even if you left your old job, you don’t have to leave to your old health insurance behind for up to 18 months. However, you will have to pay the full premium and you have 60 days to decide whether or not to enroll in COBRA and its coverage is retroactive. COBRA though will cover your whole family so it can be seen as a safety net while you’re making up your mind and navigating through the insurance marketplace. Take your time and make the right choice.