Individual Health Insurance

Individual health insurance is for individuals and families who don't have group insurance with their employers. This includes people who are self employed, just out of college and looking for a job, people in-between jobs, and others who don't have employer-sponsored health insurance.

When you apply for individual health insurance, the insurance company will take a hard look at your health status - and require questionnaires and sometimes physical exams as part of the application process. This doesn't happen with group insurance, but because you're not part of a group sharing the financial risk, insurance companies are allowed to ask these questions.

If you have a chronic illness, it's considered a pre-existing condition, which may:

• Rule you out for individual coverage
• Cause you to have a "waiting period" for coverage for that condition
• Cause your premiums to be quite expensive
• Cause your deductibles to be high

How individual health insurance works

You can provide information about yourself and get online quotes for individual insurance. Or you can work with an insurance broker to get quotes. When you've chosen a plan - usually based on deductible, copayments, and premium costs - you fill out an application and send it in. Then you may have to provide additional information about your health status in order to get approved. An insurer can deny you individual coverage.

Once approved, you receive an ID card and use the healthcare system in the same way someone in an employer-sponsored plan does. Once a year, you'll receive a renewal notice.

Choosing an individual insurance plan

To choose a plan, consider how much you've spent in the past on premiums, copayments, coinsurance, and prescription drugs.

Individual health plans generally include coverage for preventive care, hospitalization, and emergency services. Options also include pharmacy and in-network doctor copays. Certain benefits - such as maternity benefits - might not be included or may require a waiting period.

Individual HSA-Qualified HDHP

If you have an individual High-Deductible Health Plan (HDHP), you'll play all your ordinary medical expenses until you reach your deductible - which could be several thousands of dollars - and then your plan kicks in.

The main advantage of this kind of plan is that - while you're paying the majority of your everyday healthcare expenses along with low premiums - you'll have coverage when you really need it, when and if you face an expensive health crisis. This kind of insurance is appealing to healthy people who seldom have any medical expenses - but want coverage in case of a sudden illness or accident.

To help pay for your healthcare expenses, you can combine your HDHP with a Health Savings Account (HSA). Contributions to an HSA are tax-free, grow tax-deferred, and earn interest.

Learn more about how Government Sponsored Health Insurance works.

Health Insurance Glossary

Watch Healthcare Video: How does health insurance work?