Independent Health Insurance Tips

Buying insurance as an individual comes with some challenges. You have more choices for insurance than if you worked for an employer who offers only one type of plan from a single company. You also face the possibility that you may be denied health care coverage or that you cannot afford the rates offered due to pre-existing conditions.

Get Quotes

• Start by getting several quotes from different insurance companies. You can do this through an insurance broker and online on your own. Sites such as eHealth Insurance offer consumers the opportunity to get customized quotes quickly online based on where they live, their ages and other demographic information. Compare the quotes you get from a broker and online to be sure you are getting the best deal.

Persistence

• If you are denied by one insurance company for a pre-existing condition, try one or two more. Insurance companies are very different in what they accept as a pre-existing condition. Be aware that even if a company accepts you, they may raise your rates due to conditions you have.

Open Enrollment and State Plans

• Check with your insurance broker or with individual health insurance companies to find out when their open enrollment periods are. People with pre-existing conditions can often enroll during these periods and be accepted, but with higher rates than those with no such conditions. Some states offer a health insurance plan for individuals who have been rejected by insurance companies for pre-existing conditions. They may offer a premium reduction as well, based on your household's income, as Colorado's Cover Colorado health insurance plan does. Some states also offer guaranteed coverage that requires health insurance companies to offer you coverage, despite health conditions you may have. See the Kaiser Family Foundation's website for more information (see Resource section).

Coverage for Pre-Existing Conditions

• If you go without health insurance from your previous job (including COBRA) for more than 63 days, you often lose your right to coverage without pre-existing conditions waiting periods, or you may lose your right to coverage altogether under the Health Insurance Portability and Accountability Act (HIPAA). Some states have longer periods. Check with your state's insurance department for more information.

  Find out about your state's health insurance risk pool. For example, in Colorado, Cover Colorado offers coverage to those with pre-existing conditions. Coverage may be much less expensive through such a plan than it would if you purchase a business-group-of-one health insurance plan in a state that offers guaranteed issue on these plans.

Individual Needs

• Your family's individual needs will in part determine what kind of coverage you will purchase. You may be able to pay less per month if you have a higher deductible. Check on policies' out-of-pocket costs and how they relate to the monthly premium. You can purchase plans that offer higher out-of-pocket costs for lower monthly premiums. However, this may not make sense for your family if you visit the doctor often.

Coverage

• Read what each plan covers when it comes to prescriptions (percentage versus flat rate, generic and brand names), X-rays, laboratory work, hospitalization and routine office and specialist co-payments. Also find out about inetwork and out-of-network doctors for PPO plans (HMOs are generally cheaper) and what co-insurance you will have on the plan (often 80 percent paid by insurance/20 percent paid by insuree, or 70/30). Ask what your yearly out-of-pocket costs are and if there are lifetime benefits on your plan. Determine what your needs are based on your health history and how comfortable you are paying for certain expenses yourself (especially if you are considering opting for only catastrophic coverage). According to the Consumer Reports website, it is important to understand that "co-pays don't count toward deductibles or your out-of-pocket limit."

Other Options

• You may be able to get a business-group-of-one rate for your health insurance in some states.These rates are for self-employed people who want to purchase small group health insurance. Be aware that each state's rules on business-group-of-one rates differ. For example, in Colorado, the business-group-of-one rates are typically more expensive than individual health plans because they are guaranteed issue, meaning you cannot be denied coverage for pre-existing conditions. Since they are not medically underwritten in Colorado, they are more expensive. Not all states offer guaranteed issue plans for business groups of one.

  The Kaiser Family Foundation has a list of the states that do on its website. If your spouse helps you with your business, or you have a business partner, you may qualify for group rates as well if your state does not offer business-group-of-one rates.

  In addition, you may be able to add yourself to your spouse's health insurance plan. If you leave an employer that offers health insurance, consider converting your plan to an individual plan when you leave. Your rates will be higher than if you purchased medically underwritten health insurance, but you do not have to worry about being rejected for pre-existing conditions. Health spending accounts and flexible spending accounts (the latter offered through your employer) offer other health expense coverage alternatives with tax benefits. Talk to your insurance broker or your employer's human resources department for more details about these types of accounts.