Obtaining group health insurance through your employer is simple, because there are usually only just a few plans to choose from. You fill out the forms, give them to your human resources department, and you’re done.
Buying health insurance coverage on your own? Good luck.
In reality, finding and purchasing the perfect individual plan can be even easier than doing it through your workplace – and if you buy your own health insurance the right way, you can end up with much better coverage at a lower price.
Here’s a quick guide on how to do it.
Step One: Figure Out What You Need
A healthy 25-year old will normally need very different coverage than a 45-year old with a family. They’ll each need different plans than someone who has chronic or serious health issues.
Never look for health insurance without assessing your own needs first. These are a few questions that can help:
- Is the coverage just for you or for other family members as well?
- Are you healthy? How often do you usually have to see a doctor? What types of doctors do you visit? Do you have specific doctors you want to continue to see?
- Do you take a lot of prescription medications? Do you use generics or do you need brand names? Are any of them specialty drugs or extremely expensive?
The answers will help you decide how robust a health plan you need, whether it’s worth paying higher premiums in order to get low deductibles, co-pays or out-of-pocket maximums, and if there are specialties (psychiatry, for example) which your plan must cover.
Those answers will also let you decide if you have to choose a health plan that has your current doctor(s) in its participating network. And they’ll give you a good idea of the type of prescription coverage you’ll need.
Step Two: Understand the Options
Like any industry, insurance carriers use a lot of specialized terms, acronyms and abbreviations. There are some terms you definitely should understand before trying to figure out which plan is right for you.
- Deductible: The annual amount you have to spend out-of-pocket before your insurance kicks in.
- Copayment: The dollar amount you have to pay upfront for any medical service or prescription.
- Coinsurance: The percentage you have to pay for normal medical expenses. See below for an explanation of bronze, silver, gold and platinum copayments.
- Out-of-Pocket Maximum: After you’ve spent the annual maximum, your insurance covers all other charges in full for the rest of the year.
- HMO (Health Maintenance Organization): Your carrier will only pay claims for doctors in the HMO network, and you need a referral to see a specialist.
- PPO (Preferred Provider Organization): You can see any doctor you like, but insurers will pay smaller reimbursements for doctors who aren’t in the PPO network. You won’t need referrals at all.
- EPO (Exclusive Provider Organization): You have the same choice as in a PPO, without needing referrals, but insurers won’t pay at all if you decide to go out of network.
- POS (Point of Service): A hard-to-understand mix of HMO and PPO plans that you won’t see very often.
- FSA (Flexible Savings Account): A savings account set up through (and owned by) your employer, which lets you save pre-tax dollars to cover out-of-pocket health care expenses.
- HDHP (High Deductible Health Plan): These plans require you to pay a lot out-of-pocket (because of the high deductible) before insurance starts paying anything, but having an HDHP lets you have an HSA. What’s that?
- HSA (Health Savings Account): A savings account set up through your employer or privately (and always owned by you) that lets you save pre-tax dollars for out-of-pocket health care expenses – with the unspent principal and interest rolling over from year to year. You must have a HDHP to open an HSA.
- Bronze, Silver, Gold and Platinum: The different levels of coverage commonly offered by insurance carriers, listed from lowest to highest premium. Bronze plans generally pay 60% of your bills after deductibles, copayments and coinsurance, silver pays 70%, gold pays 80% and platinum pays 90%.
Step Three: Decide Where to Shop
The first question to ask here is “What’s your family’s annual income?”
The reason is this: if you make less than $47,520 per year (or about $64,000 for a family of two, $80,000 for a family of three, $97,000 for a family of four) you’re eligible for Obamacare subsidies on a public health marketplace.
Otherwise, you’ll have four options. You can still purchase from a public marketplace, just without subsidies. You can take advantage of group plans offered by your employer. You can find health insurance on your own, perhaps working through an insurance broker or going directly to an insurance company’s website.
Or you can research and choose your health insurance through a private exchange like Candor Insurance. That’s an option that’s becoming more and more popular because private health insurance marketplaces offer the greatest range of carriers and plans, allowing you to tailor your plan to your needs and budget. The most advanced marketplaces, like Candor, also make the process painless through their apps and online tools.
Step Four: Purchase Your Insurance
You now know just about everything you need to buy your own health insurance – so go for it. You never know if you’ll be hit by a bus while you’re procrastinating.
Just one final word: we weren’t totally kidding when we said “good luck” at the start of this article.
Insurance carriers don’t make things easy if you’re shopping for a health plan on your own. Comparing specifics and premiums across various websites can get complicated and frustrating.
If you get lost in the numbers and are ready to give up, remember what we mentioned about private marketplaces. They have state-of-the-art tools to help you easily compare plans and choose the right one for your circumstances.
Using the Candor app to find individual health insurance has saved a lot of people a lot of time, a lot of headaches and a lot of money.