Your Guide to Buying Individual Health Insurance

If you’ve lost your employer health plan, or if you’re self-employed, unemployed, or your employer doesn’t offer healthcare, you’ll need to purchase a health plan on your own.  This used to be a daunting process that required contacting an insurance broker and trusting he or she was signing you up for the best plan to fit your needs.

Now, you can find the information you need to compare plans, you can ask questions and you can apply all online.

Step 1: Determine the Kind of Coverage You Need

Your first instinct might be to choose the cheapest plan.  And if you’re a healthy young person who rarely goes to the doctor and doesn’t take regular medication or have severe allergies or a pre-existing condition that needs maintenance, that cheapest, most basic plan might work for you.

If you don’t fall into the lowest maintenance category, there are some things you need to consider:

• Is it important that you keep your doctor? If so, you should ask your doctor for a list of insurance providers he or she accepts and make sure you choose one from that list.  If your doctor doesn’t accept your insurance, you might have to choose a different doctor or pay completely out-of-pocket for each visit.
• Do you regularly see a specialist for a chronic condition? If so, you will want a plan that covers specialist visits.  If you like the specialist you are currently seeing, you need to ask the doctor for a list of insurance providers he or she accepts, and make sure to choose one from that list.
• Do you regularly take medications and if so, are you sensitive to the brand? If you want the option to choose between brand name and generic medications, you will need a healthcare plan that gives you that flexibility.
• Do you want the option to save money in a Health Savings Account (HSA)? If so, you must purchase a High Deductible Health Plan (HDHP) because you can only contribute to an HSA account if you’re concurrently enrolled in an HDHP.

For more information on the difference between PPOs, HMOs and HDHPs, check out our article on comparing health insurance plans.

Step 2: Research Your Options

The plans available to you depend on your location, your financial situation and the time of year in which you are applying.  In order to purchase the majority of healthcare plans, you must sign up for them during what’s called, “open enrollment”.

Open Enrollment

Open enrollment is the 6-12-week period your state allots for residents to purchase health insurance.  For the majority of states, you can purchase health insurance between November 1^st and December 15^th.  In California, enrollment is open from October 15^th– January 15^th and in Washington, D.C., it’s open from November 1^st– January 31^st.

If you’ve missed the open enrollment, you can still sign up for a long-term health plan if you’ve had a life event such as getting laid off, getting married, and having a baby, or if you qualify for Medicaid.  If neither of these apply to you, you can buy short term health insurance so that you’re covered until the next open enrollment window.

Medicaid

Medicaid is a free or reduced-cost, government funded healthcare program for people with low incomes.  The rules for Medicare have changed with many states expanding the pool of people who qualify, so even if you haven’t qualified in the past, you might now.

Finding Available Plans in Your Area

You can find out if you qualify for Medicaid and search for health plans available in your area on the same website: Healthcare.gov.  This is a federally-run site that allows you to search for plans based on your zip code, it can tell you whether or not you qualify for a tax credit or other savings based on your income and it can show you a side-by-side comparison of up to three plans at a time.

While Healthcare.gov will show plans offered in the Affordable Care Act (ACA) Marketplace, and those offered by private insurers, you are only eligible for tax credits or other savings on premiums if you sign up for an ACA health plan.

Step 3: Choose Your Plan

When comparing the available health plans, it’s important to have the answers to your questions from step 1.  Healthcare.gov will give you a comprehensive chart, showing each plan’s monthly premium, visit and prescription copays, whether it’s HSA compliant, the annual deductible, your maximum out-of-pocket expenses, and more.

If you’re cost-sensitive, make sure to take into consideration all of your likely health costs, not just the monthly premium.  You can also apply for assistance in paying for your health insurance premiums on Healthcare.gov.  Once you’ve chosen the plan you want, you can apply for it directly on Healthcare.gov or the insurance carrier’s website.