Individual Health Insurance

Individual health insurance is one of the higher cost items in your budget. While many people don’t pay all the cost of their health insurance, with supplementation from employers, it still remains a high expense in the family budget. If you use an employer’s health plan, you’ll have no control over the cost factor. These are often partially paid by employers so the premium is lower, at least for the individual employee. Family coverage may be higher. There are some ways you can lower your cost for individual health insurance but it requires extra time and thought.

Consider the way you use your health coverage. Some people don’t require a policy with all the bells and whistles. They are like the person with a tiny appetite going to a buffet every night for supper. They simply don’t get their money’s worth when they balance premium with usage. While that is a good thing, because it means they don’t have to use their individual health insurance, it’s also a waste of dollars.

For this type of individual, the seldom sick, a high deductible low cost health insurance plan with a Health Savings Account is probably the best solution. The Health Savings Account is a savings that allows tax-free growth if you use the funds for paying health related items. However, it can pay for eyeglasses, dental procedures and other items often not covered by health insurance. Unlike the flexible spending account offered by many cafeteria plans, if you don’t use it, you don’t lose it. The money in the Health Savings Account is yours to keep and grow for the time when you might not be so healthy.

Those that have average or above average individual health insurance needs will find that managed care plans might offer them an opportunity to lower the cost of their health care and coverage. Insurance companies that offer managed care policies such as HMOs, PPOs and POS policies make an agreement with health care providers to receive a lower cost for their services. In return, they provide their clients as patients for the doctors and hospitals.

The strictest of the managed care plans is the HMO. These plans only pay for doctors and providers on their list. If want to see a specialist, the plan won’t pay for the services unless your primary care physician approves the visit before you go. PPOs and POS policies often lower the payment by increasing the co-pay and maximum out of pocket pay if you go to a health care provider not on their list. The philosophy of the plan includes preventative care as a means of keeping prices lower.

The most expensive types of plans are the traditional plans with lower deductibles. That only makes sense. Insurance companies realize you’ll probably have a few doctor’s visits so will collect on the policy. Each time you file a claim, there’s a plethora of paperwork for the insurance company to handle. This and the actual cost of the claim are a reason for the higher price. A high deductible traditional policy is often quite reasonable, however.

No matter what type of individual health insurance policy you select, always compare rates. Every company sets rates according to loss experience, income from investing surplus premiums and operating expense. When you compare rates, you’ll often find that you can save hundreds of dollars every year. If your employer plan is expensive for family coverage, you might even consider using an outside individual health insurance plan for your family and simply cover yourself through work.