Health insurance protects you financially when you need medical attention and allows you access to quality health care. An individual health insurance plan offers an alternative to individuals and families who are not eligible for a group plan through an employer. Insurance companies usually decide the coverages offered for each policy, resulting in a variation between policies. Comparing the available options allows you to find the most affordable policy that offers the necessary coverages.
Needs
The health status of the individual or family members on the policy affect the selection process. Families with young children are likely to have several visits to the doctor for well-child checkups and sicknesses. A policy with a lower deductible and lower copayments might be a better option. A single person in good health who rarely visits the doctor can get away with a higher deductible or higher copayments in exchange for a lower premium. Consider how often the insured individuals utilize medical services, as well as their general health when selecting a policy.
Types
An indemnity or fee-for-service plan splits the cost of medical services between the insured and the insurance company. You get the option of choosing your doctors and hospitals, according to AARP.
Managed care plans, such as preferred provider organization, or PPO, and health maintenance organization, or HMO, follow the same of splitting the cost, but they are more restrictive in doctor and facility selection. You generally must choose a doctor within the network for the policy to pay for the services. Other policies cover the services but require you to pay more.
Function
An individual insurance policy starts with an application that includes questions about your health. The application aids the underwriters in assessing your risk and assigning you a category that determines your premium. Paying your premium puts the policy in force, allowing you to use the insurance at medical facilities.
When using an in-network doctor, the medical office generally submits the claim to the insurance company so you don't have to handle any paperwork. You pay your coinsurance or copayment at the time of service to fulfill your portion of the cost.
Coverage
Comparing the individual coverages and the levels of each coverage allows you to determine which policy best fits your needs. Identify any restrictions or limitations in coverage for each potential policy, such as pre-existing conditions. Maternity coverage and prescription drug coverage might also be restricted on an individual policy. Riders are often a possibility if you need the extra coverages.
The coinsurance and copayments represent your portion of any doctor's visits. Compare these levels for each policy in relationship to the premium for the policy. For example, if one policy require a $25 copay for each visit but has a much lower premium than a policy with a $20 copay, you might save money overall with the $25 copay.
The deductible is another area that affects the premium of an individual policy. With a higher deductible, you save money on the premium. Compare the deductibles versus the premium for each policy to find the best balance for your health situation.
Considerations
The final selection of an individual medical insurance policy is a personal decision based on your financial situation and health needs. Comparing all of the potential policies side-by-side enables you to see how they stack up in all of the benefits offered and costs involved, in premium and in deductibles, coinsurance and copays.
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