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Private Health Insurance Problems

When you are not covered by a group health insurance plan, you may need to buy individual insurance for you and your family. While this type of coverage can be beneficial and keep you from having to pay large medical bills, it also comes with a few potential problems for policyholders.

  1. High Costs

    • One of the most prominent issues that people have with private health insurance is that it costs much more than a group plan. When you buy this kind of insurance, you will find that the premiums are generally higher than what you could expect from a group plan. The deductible for this type of plan is also much higher than what you would normally have to pay. According to the Commonwealth Fund, the average person with an individual insurance plan has out-of-pocket costs that are higher than 10 percent of their annual income.

    Pregnancy Exclusion

    • Another issue that many people run into with individual health insurance plans is the pregnancy exclusion. Most individual plans do not provide any maternity coverage for their policyholders. Some of these insurance companies do allow you to purchase an additional maternity rider on top of your regular coverage. This essentially amounts to prepaying for your maternity costs because you have to pay for the rider for up to a year before it takes effect. If you get pregnant while on one of these plans, you will basically be paying out of your pocket for the childbirth.

    Price Increases

    • Medical costs are continually rising in the industry and much of these price increases are being passed onto those who buy individual insurance plans. Group plan rates may go up but do not generally increase by as much as the premiums for individual insurance plans. According to MSNBC, almost 77 percent of individuals who have these private health plans saw their rates increase in 2010. When this happens, the only choice you have is to pay the increase or try to find a cheaper plan.

    Poor Coverage Options

    • Many private insurance plans are not as comprehensive as group plans, and it leads many policyholders to avoid medical care. For instance, with a group plan, you can usually have a low deductible and a reasonable co-pay amount. When you by an individual plan, you may not even have a co-pay or any help with prescription drugs. You may also not get any help with routine checkups or other preventive care measures. These policies are usually designed only to help with very large bills.

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