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A Consumer’s Guide to Individual Health Insurance

Individual Health Insurance

If you are reading this, you perhaps fall into the category of the 65% of Americans using individual healthcare insurance. You may fall into one of many subcategories of such consumers ranging from employees in small businesses, to entrepreneurs, retirees or early career workers. Wherever you fall, you definitely agree with other reader of this article and the rest of the American community on two things; individual health insurance is complicated and it is expensive. So, let’s explore this maze together.

Why is My Premium So High?

Since the cost of individual health insurance has been the biggest subject of debate in the United States over the last five years, it would make the ideal starting point. To maintain an individual health insurance plan, a consumer pays a periodic fee, called a premium. This premium varies across individuals and is determined by a couple of factors, including age, profession, gender, health history, genetics, fitness level, marital status and health insurance history. Each of these factors influences the likelihood of claims, the official term for hospital visits by the patients. While these may be obvious influences, such factors as geography have also been found to determine premiums. Usually, premiums are paid on a monthly or yearly basis, depending on the provider and the preferences of the customer. If you would like to estimate your individual health insurance costs, online tools such as WebMD and Healthcare.gov would be useful. On average, Americans spent $9,900 on healthcare last year, as reported by Actuary at the Centers for Medicare and Medicaid Services in Baltimore.

The Benefits of Individual Healthcare

Given these prohibitive costs, Individual Health Insurance must surely have some advantages over group healthcare plans which are usually paid for by employers. The biggest advantage of individual health insurance is the freedom from the employer. Should the user choose to change careers, they get to keep their plan wherever they go. This portability ensures continuity in an individual’s healthcare history and process, factors which may influence future costs of individual health insurance, especially at retirement. Secondly, the freedom in choosing the healthcare provider is also crucial. For financial, accessibility or personal reasons, individuals may prefer one provider to the other. Having a group insurance plan does not afford this liberty. Nonetheless, a big drawback is that the process of choosing an individual healthcare provider can be long and stressful, given the abundance of options.

How Do I Choose the Right Provider?

As far as options go, the three most popular providers in the United States are UnitedHealth Group, Kaiser Foundation Group and Wellpoint Inc Group. Declaring any of these providers the best is a hard call, given that preferences vary across individuals. However, the most important factors in choosing a provider include accessibility, quality of service and cost. The biggest players on average have the most robust network of hospitals and healthcare providers. However, the best individual health insurance service is often provided by smaller players with strengths in certain regions and healthcare needs. On cost, there is no clear trend between the bigger and smaller players. As already mentioned however, consumers can employ online calculators and web tools to determine the most cost-effective plans.

Regulation and The Future of Healthcare

Thanks to the Affordable Healthcare Act (aka ObamaCare), individual health insurance became more accessible over the last few years. However, the jury is still out on whether healthcare has become more affordable or not. In the midst of this uncertainty, President Elect Donald Trump has vowed to replace the current form of the affordable healthcare act. While this may worry some consumers, it is important to note that efforts to alter the plan over the last few years have failed largely because they do not serve the best interest of the people. While regulations may change, the terms are more than likely to get better for the average American, considering that the presidency was won on the shoulders of Americans who benefitted from the healthcare reforms.

Lyle V. Hensley

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