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There’s strength in numbers, particularly when you’re buying health insurance. As part of a group plan at work, you can generally lower premiums — but sometimes a group health plan may not be an option.
If you leave your job — or start another one that doesn’t offer health insurance — you may be surprised at just how expensive the same coverage is when you buy individual health insurance.
An individual plan is one purchased on the private market, not tied to workplace benefits. Although they are called “individual” plans, they can cover you, your spouse and your children.
Health plans that cover children cannot deny or limit coverage for youngsters under age 19 because of a health condition. This provision of the federal Patient Protection and Affordable Care Act went into effect in September 2010. Starting in 2014, the rule will be extended to everyone.
For now, though, there is no guarantee that an insurer will accept an adult for an individual policy in most states. Individual plans are medically underwritten and the insurer may reject your application or attach exclusions to the policy if you have health problems. Under “guaranteed issue” laws, some states don’t allow this practice and require that health insurers offer you a policy, no matter what medical problems you have. The Kaiser Family Foundation has a list of guaranteed issue laws.
People enrolled in individual plans pay premiums determined primarily by their expected health care costs, so prices will be higher for those who are older and/or less healthy.
Pricing is probably the most bewildering aspect of individual health plans, so it’s worth your time to shop around for health insurance quotes. For instance, premiums for similar products from different insurers can vary by as much as 50 percent for the same person.
Don’t let confusion tempt you to go without coverage. You might be healthy today, but develop a serious illness or suffer an injury tomorrow, which could lead to financial disaster if you’re uninsured. Sixty-two percent of bankruptcies are related to medical bills, according to a 2009 study in the American Journal of Medicine. Plus, you’ll lose your rights to group health coverage of pre-existing conditions if you go without insurance for 63 days or more, a time period set by the Health Insurance Portability and Accountability Act (HIPAA).
Ask yourself these key questions:
In some states, you can buy health insurance as a “group of one” if you are a self-employed sole proprietor and can show that you’ve been in business for at least 30 days. The opportunity is available even if you work out of your home. The Kaiser Family Foundation has a list of states where you can buy guaranteed issue “group of one” health plans.
If you live in a state that does not offer “group of one” insurance policies, you might still qualify for a group rate if you own a business and have at least one partner or employee. Does your spouse do some bookkeeping for your company? That’s a two-person business, eligible for a group rate and a group policy.
Leaving a job that had health benefits? Consider these options:
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