How does Individual Health Insurance work?

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1 How does Individual Health Insurance work? How does Medical and Health insurance work for individuals that do not have access to employer group coverage; what are the best options? Also, what pitfalls do I need to be aware of? Group Coverage Coverage arranged by your employer and your cost deducted from your paycheck. Great coverage, low cost. Subsidized by employer, so lowest cost and best coverage available. As long as you are an employee. Options for individuals that do not have access to group medical insurance, from best to worst (in many cases): Enrollment in Spouse or Parent Job-Based Health Plan Private Insurance COBRA State Continuation Policy (only after COBRA exhausted)

2 Enrollment in Spouse or Parent Job-Based Health Plan This is the same as Group coverage, only it is with your spouse or parent s company, not your own. Because you no longer have coverage, you are able to be covered under their group plan. This is the same as Group coverage, only it is with your spouse or parent s company, not your own. Subsidized by employer. As long as your spouse or parent is an employee.

3 Private Insurance Coverage you personally arrange with an insurance Company. You have less negotiating ability than your old employer. Unlike Group Coverage, you are not guaranteed coverage. You can be denied, or limited for preexisting conditions. You arrange coverage with an insurance Company, MUCH more flexibility and MANY more options; however, no negotiating power and no subsidy. Because of the flexibility, you can get good insurance if you are willing to pay for it; or take on more risk (higher deductible) to lower your monthly premiums. As long as you pay for it. Yes. You can be denied, or limited for pre-existing conditions. You will go through extensive review for medical issues. Also, if you lie on your application, you will be denied coverage. Yes. They can be denied, or limited for pre-existing conditions. They will go through extensive review for medical issues. Also, if you lie on your application, you will be denied coverage. Where does this rank as an option, is it better than COBRA? If you are healthy, private insurance is likely better (less expensive) than COBRA. If you are not healthy or have significant issues, COBRA could be better.

4 COBRA The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) requires most employers with group health plans to offer employees the opportunity to continue their group health care coverage under their employer s plan if their coverage otherwise would cease due to termination, layoff, or other change in employment status. Coverage generally is for 18 months. You stay on your old insurance plan without the subsidy. You will pay the entire unsubsidized amount of your coverage. As many employers cover 80% or more of this coverage, it can be very expensive. The fact it is group coverage also drives up pricing due coverage for unhealthy individuals that cannot be specifically excluded or charged more for. Generally 18 months, then you must move off COBRA. No; but coverage does not last forever (generally 18 months) and may be very expensive. No; but coverage does not last forever (generally 18 months) and may be very expensive. Where does this rank as an option, is it better than private insurance? If you are healthy, private insurance is likely better (less expensive) than COBRA. If you are not healthy or have significant issues, COBRA could be better.

5 State Continuation Policy Guaranteed coverage after COBRA has been exhausted. However, you are specifically reviewed for medical issues and there is no price limit that you can be charged, e.g. if you have health issues this can be more expensive than COBRA. Can be on forever, no time limit. 63 days to elect after COBRA exhausted. Guarantees coverage, even with pre-existing conditions, but coverage can be very costly. Coverage can be very costly, even more expensive than COBRA. As long as you pay for it. Yes. You cannot be denied, but you may not be able to afford the coverage. Yes. You cannot be denied, but you may not be able to afford the coverage. Where does this rank as an option? This is likely the most expensive option there is.