What is Individual Health Insurance?
Agnus Smith | Published: June 14, 2018
Individual health insurance pays for the eligible healthcare expenses for an individual, which will also include a spouse and dependents, in exchange for the premiums established by the healthcare company. The premium, which is a set dollar amount typically paid to the insurance company every month, establishes coverage as long as payments are maintained, or until coverage is either replaced or canceled.
Various Forms of Affordable Health Insurance
Health insurance is a product or commodity available to people for purchase in a variety of plans to help pay the cost of surgical and medical expenses incurred by the policyholder. Typically, over half of non-elderly Americans get their health coverage through an employer-based plan, which is known as group insurance. There are still others who are covered by public state-aided plans such as Medicare, Medicaid or, in the case of California, the equivalent called Medical.
Passage of the ACA Puts Private Health Insurance on Everyone’s Radar
A statistic from 2013 showed 47 million people were considered uninsured, which means the Affordable Care Act's implementation came a great time. Due to the passage of the ACA, more people have both become aware and engaged in the purchase of individual health insurance. This is largely due to the imposition of a tax penalty included in the ACA that may be automatically deducted from your individual tax returns if you do not have a qualifying individual health insurance plan.
It was after careful examination of how so many people were considered “uninsurable” and, therefore, unable to obtain individual health insurance that the ACA established a national set of 10 Essential Health Benefits including the following:
- Ambulatory patient services
- Emergency services
- Laboratory services
- Maternity and newborn care
- Mental health and substance abuse disorder services
- Prescription drugs
- Preventive and wellness services
- Pediatric services
- Rehabilitative and habilitative services and devices
The Effort to Make Health Coverage More Affordable for All
Previously, individual plans were medically underwritten in almost every state. Underwriting is the tool used to mitigate losses or claims through denial of coverage due to certain circumstances. The single most significant reason for denial is what is called pre-existing medical conditions. Under the ACA, insurers are prohibited from discriminating against individuals based on pre-existing conditions.
Another purpose of the ACA mandate is to help even the playing field. Insurance historically operates on the law of large numbers. This simply means that the more people contributing to the pool of funds established to pay for claims, the greater the company’s ability to absorb the wide-ranging claims that arise without risking insolvency. State regulations exist to help prevent such an eventuality as well. However, when it comes to medical insurance, the risk is very high for insurance providers.
Medical claims are characteristically much higher than other types of insurance risks due to the cost of treatment and services. The mandate to guarantee health coverage on a national level is also intended to avoid “adverse selection” to help provide affordable health insurance across the board. Adverse selection is the process of purchasing private health insurance only when there is a need to use it.
Seek Answers to Your Questions and Get Health Insurance Quotes
To quote Spock from Star Trek II, The Wrath of Kahn, “The needs of the many outweigh the needs of the few or the one.” What works for one in the swath of group coverage attempting to satisfy the many, may not work as well for you individually. Health insurance quotes can be obtained for private health insurance.
Affordable health insurance through the marketplace, state exchanges or with the help and advice of a licensed agent or broker provides you the opportunity to make a proper, comprehensive comparisons. While employer-based group insurance may appear to be cheaper overall, there is merit in examining the fundamental difference between group and individual health insurance. Individual plans give you the opportunity to plan for your financial future while selecting policy benefits tailored to your specific needs. Young people find group insurance more convenient since they typically don’t use health insurance as readily as the older demographic.
Despite the complexities of group and individual health insurance plans, it could all be reduced to utilitarian arguments. This is where the sage advice of those professionals who possess the expertise to navigate the array of coverage offerings and premium costs comes in handy. The internet is a great place to learn more about how best to satisfy your personal needs and choices. First Quote Health can provide the best health insurance quotes and third-party reviews of private health insurance providers in your area.