Individual Health Insurance Plans

Jun 12, 2010 | By Owen Pearson

As corporations continue to look for ways to cut costs, many are discontinuing group health insurance plans, or ending subsidies that made these plans more affordable. Also, small businesses, which employ about 52 percent of the workforce in the United States, according to the Department of Labor, often lack the leverage to purchase affordable group health insurance plans for their employees. This leaves millions of workers to find affordable coverage on their own.

Health Maintenance Organization

A Health Maintenance Organization (HMO) is a health insurance model in which an insurance company contracts with medical providers to offer medical treatment services to insured people, called "subscribers," for a fixed fee per subscriber. The primary focus of an HMO is reducing medical costs, according to Carla Rowley, author of "Cheap Insurance for Your Home, Automobile, Health and Life." This health insurance model works well for individual health insurance because controlling medical costs helps keep premiums down.
A Primary Care Physician (PCP) is a distinguishing feature of HMO individual insurance plans. Before you can visit a specialist, you have to obtain a referral from your PCP, which is typically your family doctor.
An HMO saves you money on premiums and typically offers lower co-pays than other plans, but it also limits your choices when receiving medical care.

Preferred Provider Organization

A Preferred Provider Organization (PPO) health insurance policy is designed around a network of physicians, hospitals and specialists that provide care to members at reduced costs to the insurance company. If you purchase a PPO policy, you are not required to use a certain doctor or specialist, but you will likely pay higher co-pays and deductibles if you seek treatment outside of the network, says Rowley.
A PPO gives you greater freedom to choose the medical professionals you want to provide care, but it is also typically more expensive than a comparable HMO.

Health Savings Account

A Health Savings Account (HSA) is not traditional health insurance, but it can provide another means for paying for health care costs. This type of individual plan allows you to pay for current costs and save for future health care tax-free.
According to the Department of the Treasury, you must be covered by a high-deductible health insurance plan to qualify for an HSA. The money you place in your HSA can go toward paying deductibles, co-pays and other expenses not covered by your individual health insurance plan.