Beginning the search for an individual health insurance policy can be an ominous and daunting task for someone with little or no experience in the health insurance industry. Since the number of insurance companies increases every day, how is a person to know which ones are any good? Plus, each company usually offers multiple variations of these policies, so deciphering the benefits and comparing products side-by-side can be extremely confusing, and can also take forever.
One of the best options when researching individual health insurance policies is to avoid those companies that you’ve never heard of before. There are countless smaller, start-up insurance companies everywhere that are in desperate need of new policyholders to keep from going out of business, so to attract more customers these companies offer lower premiums than the insurance giants. A problem then becomes apparent if there’s a claim, or in finding a participating provider. By sticking to companies that have been around forever, those with virtually unlimited resources, you will have a smoother, more efficient experience.
It’s also extremely important to learn to identify the difference between a legitimate insurance policy and a mere discount program. Far too many consumers mistakenly enroll in a discount program offered by one of the smaller companies, which are not actual insurance companies, without fully realizing the limited scope of the coverage and the potentially massive out-of-pocket expenses. The larger, legitimate insurance companies provide an actual insurance policy, wherein members have specific, documented, verifiable coverage. Those smaller companies sell discount program memberships, wherein members are eligible for some kind of percentage discount off physician services. The size of these discounts is typically between 10% and 30%, and rarely includes in-patient hospitalization treatment.
The best advice for anyone in search of individual health coverage is to read all the fine print. Too many consumers end up paying for policies that don’t provide the benefits they anticipated, yet don’t realize this fact until they need coverage the most. Companies will very often create seductive advertisements that can be misleading, many of which focus on only one particular benefit while ignoring other important policy features. By taking the time to read all of the material, or seek assistance from an insurance professional, you are more likely to get a product that’s appropriate for your needs and budget.
One final piece of advice is to be prepared to pay more than you expect. A large number of people searching for individual coverage are doing so because they’re no longer eligible for an employer’s plan, with expectations are that individual policies will be very similar in both features and premiums. This is not the case. Individual policies are always more expensive than group policies, and premiums are very often based on age. The coverage is also much less comprehensive, and typically includes high deductibles and copays.
The most significant difference between group policies and individual policies is prescription coverage; nearly all individual policies have an Rx benefit of only 50%, with some kind of maximum as well. This means the consumer will be responsible for half of the retail cost of their medication, regardless of the price, and once the insurance company has reached a predefined limit the benefit is exhausted. Those people taking medication on a regular basis may find themselves in a difficult position, particularly if no generic versions are available.