Individual Health Insurance

For most people, group health insurance is a better choice than individual health insurance. Group insurance usually costs less and offers more benefits.

However, some people can't get group health insurance because they are self-employed, work for a small company, have run out of COBRA benefits, or for some other reason. They must turn to individual health insurance plans -insurance they buy themselves

Many insurance companies offer health insurance plans to individuals. However, if you're over 50 years old, there can be problems:

• It might be harder to find a company that will sell you a health insurance policy, especially if you have a serious medical problem.
• You might have to get a medical exam to prove you are insurable, (you don't have a serious medical problem).
• Individual insurance usually costs more than group insurance.
• You might get fewer benefits than with group insurance.

Compare Plans

It's important to shop around and compare health insurance policies and plans. A first step could be to decide how much you can afford to pay. Then, you can look for health insurance that will give you the best health coverage for you and your family at that price.

The answers to the following questions can help you compare both the cost and the benefits of the plans you are considering:

1. How much of my doctor and hospital bills will this health insurance plan pay for?
2. How much will I have to pay each month (premium) for this plan?
3. How much will I have to pay (deductible) before the plan begins to pay?
4. How much will I have to pay for office visits to the doctor?
5. Does this plan pay for preventive health care? This includes routine medical checkups and shots, such as a flu shot, to prevent disease.
6. Does this plan have rules for people who already have serious, chronic medical problems? Will these rules keep me from getting the care I need? If so, for how long?
7. What services are covered by this health insurance? Will it pay for care at a hospital emergency room or urgent care center? Does it cover routine surgery, hospital stays, doctor visits, nursing home stays, home health care, and medical equipment and supplies?
8. Does this plan cover visits to the eye doctor and the dentist?
9. Does this plan cover prescription drugs?
10. Does this plan pay for catastrophic medical costs, costs that are so high it would take most of my money to pay for them? Is there a limit to how much I must pay each year?
11. Is there a yearly or lifetime limit to how much the plan will pay for medical costs?

Individual Health Insurance Options

You have a number of options when shopping for individual health insurance:

• Fee-for-Service Insurance
• Managed Care Plans
• Open Enrollment in Managed Care Plans
• Association-Based Health Insurance
• High-Risk Pools

Fee-for-Service Insurance

A fee-for-service insurance policy (also called indemnity insurance) is a traditional kind of health insurance. It pays a part of each medical service you get, such as doctor visits or hospital stays. You pay the rest of the cost. You can go to any doctor or hospital you choose. However, you usually pay a higher monthly cost for your medical care than if you were part of a managed care plan. Traditional health insurance is less common than it used to be.

Managed Care Plans

Many people get health insurance through a managed care plan, such as a health maintenance organization (HMO) or preferred provider organization (PPO.)

• In managed care plans, health insurance companies contract with doctors and hospitals to provide health care to its members. These doctors and hospitals make up the plan's network.
• In managed care plans, you may only be able to see the doctors and hospitals that are part of the plan's network. Some plans, like PPOs, allow you to use doctors and hospitals outside the plan network, but you usually pay more.
• In HMOs, your visits to the doctor are pre-paid by the plan. You only pay only a small copayment, from $10 to $20, each time you visit the doctor.

Open Enrollment in Managed Care Plans

Some states require managed care plans to have an "open enrollment" period each year. Open enrollment usually is a one-month period during which managed care plans must let people join, even if they have an ongoing, serious medical problem. This can be a very helpful option if you have not been able to get health insurance because of a medical problem. You can sign up for a managed care plan during an open enrollment period without having to get medical exams to prove you can be insured.

FYI: A few states require insurance companies to offer their plans to people who have not been able to get health insurance because of their health. This option can apply to more types of health insurance than just managed care plans. Check with your state insurance department to learn the rules in your state.

Association-Based Health Insurance

You might be able to get health insurance through a trade or professional association. Many professional, community, and religious organizations offer their members health insurance coverage at group rates. If you are a member of any trade or professional association, ask if it offers health insurance coverage. Find out:

• How complete the coverage is
• How much of your medical expenses from routine doctor visits and prescription drugs to major surgery will the insurance cover
• What it will cost each month
• If it covers family members

Your state insurance department can tell you what your rights are under association-based health insurance plans.

High-Risk Pools

In some states, high-risk pools might be a source of health insurance for people who have not been able to get health insurance because of a serious medical condition. High-risk pools are considered the last resort, when all other attempts at getting health insurance haven't worked out. To get health insurance through a high-risk pool:

• You must have been refused health insurance coverage by at least one or two insurance companies, or
• You could not find a health insurance plan with a monthly premium less than the monthly premium in the high-risk pool.

Your state insurance department can tell you if your state has a high-risk pool program.

Health Insurance Brokers

If you are having a hard time deciding which insurance plan is best for you, some people talk to a health insurance broker. An independent broker sells many different kinds of health insurance.

Other brokers sell plans from just one company, so it's best to talk to a few such brokers before choosing one. Be sure you understand how the broker is paid - whether you pay or the insurance company pays the broker a commission. That may affect the plan that the broker recommends. If you decide to use a broker, make sure the broker will work in your best interest, and remember that sometimes this costs more and not all insurance products are available through a broker.

Other Types of Policies

There are other kinds of insurance policies that should not be mistaken for comprehensive health insurance. Specific disease policies, such as "cancer policies," pay for care only for the specific disease. Hospital indemnity policies pay you a set amount of money for each day you are in the hospital.

These policies may sound good but don't really help with your health care costs. You would be better off checking out the other insurance options.

AARP Resources

Your Health: State-by-State List of HMO Report Cards Online
A list of the states that have HMO report cards, comparing the performance of competing health plans in an area.

Additional Resources

U.S. Agency for Healthcare Research and Quality (AHRQ)
Gives guidance on choosing health insurance in articles such as "Checkup on Health Insurance Choices and "Choosing and Using a Health Plan."

National Association of Insurance Commissioners (NAIC)
Contact information for your state insurance department.

Healthinsuranceinfo.net
An interactive site that gives a review of the health insurance protections in your state.

HealthCareCoach.com
From the National Health Law Program, tips on getting the health insurance you need.