5 questions to help you choose an individual health insurance plan

Many Americans — whether self-employed, without job benefits, or simply in search of options beyond their employer's group network — are buying health coverage for themselves these days. They're also finding out that it can be pretty darn confusing. Not to fear: we have 5 key questions that should help you get started choosing individual health insurance.

benefits of individual health insurance

Even if you have access to an employer-sponsored group health plan, that doesn't mean it's always best for you.

For one, group plans are priced based on the average health of all the members involved. Which means, if you're really healthy, you could be paying more than you need to. Plus, when you use the Healthcare Insurance Marketplace under the Affordable Care Act to shop for individual health plans, you may qualify for certain government discounts that don't apply to group plans.

Of course, for many, using a group plan is still the most affordable, convenient, and trusted way to get the medical care they need. But if you're buying your own health insurance, you're certainly not alone.

5 key questions to consider

It's tough knowing where to start when choosing between individual health plans. Luckily, focusing on these 5 areas will help you sort through the key factors of this big-time decision.

1. How healthy am I?

Your best indication for the coming year is, naturally, the previous one. Did you see the doctor more than a couple of times? Did you buy many prescriptions? Did you have to stay in the hospital?

Fact is, not everyone needs a top-tier health plan. If you sought medical treatment sparingly in the past year, a more affordable, middle-rung plan might be all you need. If you or members of your family have spent a lot of time in the doctor's office, on the other hand, you'll likely want to invest in a higher-premium plan for more comprehensive health care.

2. What type of individual health plan do I want?

When buying your own health insurance, ask yourself what kinds of doctors you or your family plan on seeing, and if your current doctor is available through these common plan types:

  • A HMO (Health Maintenance Organization) is typically your most basic option. This policy type comes with a select group of doctors for you to choose from in order to seek care.
  • A PPO (Preferred Provider Organization) also comes with a network of recommended caregivers. However, you can usually get coverage from doctors outside the network at an increased out-of-pocket cost.
  • A POS (Point of Service) plan is a mixture of a PPO and HMO. You choose a primary care physician from your network, and if you want to see a specialist (chiropractor, acupuncturist, etc.), you need that primary doctor's referral.

3. How much does it (really) cost?

The monthly premium isn't the only number that matters. Also factor in the annual deductible (the amount you pay before insurance kicks in). If you're extremely healthy, you may feel comfortable with a higher deductible, which usually means a lower premium. Make sure to check the fine print here, too, as some insurers only count certain expenses toward your deductible, or have 2 separate deductibles — one for in-network providers and one for those out of network.

Also figure out what portion of treatment is covered after you've met your deductible. Do you pay a fixed copayment every time, no matter the cost of service, or a coinsurance percentage (which means the bigger the bill, the higher your payment)?

4. Are prescriptions included?

It's easy to think about the cost of a visit to the doctor's office … while forgetting the cost of medication that often follows. Covered prescriptions are one of the most common benefits people use and need, and not all individual health insurance plans have them. Make sure to thoroughly explore your plan's benefits so you don't end up with a surprise bill at the pharmacy.

5. How is emergency care handled?

These days, it seems like the cheapest room in your local hospital goes for the same price as the nicest suite at luxury hotel. Point being, having emergency care included in your individual health insurance is crucial to protecting your savings. Check to make sure any policy you're considering covers hospital stays, ambulance rides, and even screenings like X-rays and MRIs.

get a free health insurance quote through esurance

Now that shopping for individual health insurance is a little less intimidating, we'll help you put your newfound expertise to use. By getting a health insurance quote through our site, you can connect with one of our trusted partners and compare different plans.

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