An individual health plan is a contract between an individual and an insurance company that guarantees that almost all the medical expenses mentioned in the contract are covered by the company. This includes hospitalization, medicines, consulting specialists and certain therapies such as chemotherapy and radiotherapy.
Individual plans are medically underwritten and there is no guarantee that an application will be approved. This is drawback of buying individual health insurance. Insurers may reject an application or attach exclusions to the policy if the applicant has health problems. However, the Affordability Act will soon change that and insurers will no longer be able to reject applications based on pre-existing medical conditions.
Individual plans are also usually not preferred because of their high costs. They also come with specified health care services and there are no additional benefits attached. But the biggest advantage of buying individual health insurance is that it can be customised to the personal needs of the beneficiary. And it is this advantage that can make an individual plan cheaper or costlier than other plans.
If a person has a pre-existing condition or is old or has a dubious medical history in his plan, then he should opt for a plan that comprehensively covers all medical treatments. This will make his premiums expensive. But here again, if he stays away from any form of addiction, then he can exclude benefits such as drug and alcohol rehabilitation program. This will bring down the rate of his premiums.
Similarly a person in the prime of his health and age can purchase a basic individual health plan. He need not pay more par health services that are not the need of the hour. Considering his lifestyle, he could also exclude benefits such as maternity and drug and alcohol rehabilitation programs. This will also decrease the price of the premium that he is supposed to pay.
It is important to be clear on the premium that is to be paid, the deductible, the co-pay, the yearly limit of coverage and the riders on pre-existing conditions before purchasing individual medical plans. It is better to have confirmed information before spending so much on individual health insurance.
Quote comparison is an important aspect while shopping for individual policies. Individual health insurance plans can vary up to 50% from one carrier to another. One may get two quotes that are close but looking at the coverage minutely could show some major differences. It is essential to spend some serious time looking at the options.
Managed healthcare plans such as the HMOs, PPOs, PoS and Indemnity policies are the most affordable way to purchase individual health plans. They are cost-effective, have restriction attached and yet address individual needs. They are cheaper than most other individual plans and still cater to comprehensive medical needs of individuals. These plans have in fact, the most popular healthcare plans, especially for those looking for individual health care.
Considering its high price, one may be tempted to go without one. But it is better to be well prepared for health calamities or one could end up being medically bankrupt, considering the expensive healthcare system of the country. Buying individual health insurance might be expensive, but when compared to the medical expenses one may have to cough up without any kind of coverage, the premiums will seem like a good deal. The choice is for the individual to make.
About the author
Shaun exercises his expertise in health insurance and frequently advises people on buying individual health insurance.