Individual & Family Health Plans

Many people have their insurance provided by their employer under group insurance, but not everyone has access to this. In addition, although individual and family insurance is available under the Medicare and Medicaid programs, you may not qualify for these either. This doesn’t mean that you can’t get insurance. You can still purchase an insurance cover for yourself and your family from a private health insurance company.

Individual and family insurance can either be managed-care or indemnity, depending on the type of provider you choose, how you pay the bills, and the out-of-pocket expenses. Let’s find out more about these two types of insurance plans.

Indemnity Plans

With indemnity plans, the insurance company pays its share of the health expenses after they receive the bill, meaning you probably have to pay for services when you receive them and then get a refund from the company afterward. These types of plans cover a wider range of healthcare services than managed-care plans.

Managed-Care Plans

In this type of coverage, healthcare providers form a network that provides services for patients in this plan at rates that have already been negotiated. They then hand in the claim to the insurance provider on your behalf. With this type of plan, you have lower out-of-pocket costs and a wider selection of healthcare providers to choose from than with the indemnity plan. Managed-care plans further include PPO, HMO, and POS plans.

Preferred Provider Organization (PPO) Plans

This plan encourages members to use the services of a network of healthcare providers contracted by the insurance company. You can also use healthcare providers outside this network, but you would pay more for their services. You also may have to pay an annual deductible before your insurer can start paying for your medical expenses. Some services will also require you to copay or pay a percentage of the total cost of your bills.

Health Maintenance Organization (HMO) Plans

With this plan, you have to select a primary care physician (PCP), who will cater for most of your healthcare. If you need to see a specialist, your PCP has to give you a referral. If you obtain services from providers who are not in your network, or see a specialist without a referral from your PCP, you’ll bear all the expenses yourself. In this, HMO plans are less flexible than other insurance plans. However, HMO members have lower out-of-pocket expenses compared to other plans. You also get coverage for a wider selection of preventive care services than you would get with another plan. Additionally, you have few copayments and are not required to pay a deductible before your coverage starts, as is the case with PPO Plans. The HMO plan also does not require you to hand in your own claims to your insurer.

Point of Service (POS) Plans

These plans have some features of both PPO and HMO plans. Members of this plan have to select a PCP from the network of physicians provided by the insurer. Depending on the policy, you may or may not pay a deductible for your PCP’s services. POS plans also cover preventive healthcare services. Compared to HMO plans, POS plans offer higher coverage for services provided and referred by your PCP. Unlike HMO plans, however, POS plans will cover for services outside the network of providers, albeit at a lower rate. You will however have to pay upfront for those services and then claim for a reimbursement from the insurance company yourself. Keep in mind that policies differ with each insurance company, and some of these features may be different.

Frequently Asked Questions

How do I buy Individual/ Family Insurance?

There are three ways to buy individual and family insurance. These are listed below.

• You can contact an insurance provider directly.

• In California, you can call an agent or insurance broker licensed by the California Department of Insurance (CDI) to take you through the process. To avoid fraud, ensure you use a licensed agent or broker, and remember to check if their license is current.

• You can buy a policy from Covered California. This is a healthcare marketplace that was created as part of the Affordable Care Act. When you buy individual and family insurance through Covered California, you also qualify for a premium subsidy.

What is a copayment?

A copayment (or copay), is a charge you pay for specific medical services received. You pay part of the total cost and your insurer pays the rest of the charges.

What is a deductible?

This is a specific out-of-pocket amount your insurer requires you to pay annually before your plan can start paying for claims pertaining to certain services. HMO insurance plans don’t require a deductible, while PPO plans and indemnity plans require it.

What is coinsurance?

This is the portion of the expenses you pay after you meet your deductibles. So if your insurance company pays 70% of your medical expenses, you have to pay the remaining 30%.

How old should I be to buy individual insurance?

Under the Affordable Care Act, you are covered under your parents’ insurance policy until 26 years of age. After this, you have to get your own cover.

If I have a pre-existing condition, will I be denied coverage?

The Affordable Care Act doesn’t allow insurance companies to deny people with pre-existing conditions coverage.

Can an insurer charge me higher premiums based on my health status?

Under the Affordable Care Act, insurance companies cannot charge you a different higher premium due to the status of your health.

Can I get a subsidy on premiums from private health insurance companies?

In California, you can only get a subsidy on premiums if you meet certain income requirements and only if you buy your coverage through Covered California.

Does cost-sharing have an impact on my premiums?

Yes, it does. Cost-sharing refers to co-insurance, copays, and deductibles. The higher they are, the lower your premiums will be. So a plan with a co-insurance of 40% will have lower monthly premiums than a plan with a co-insurance of 30%.