Individual Medical Insurance

Individual medical insurance might be purchased for the following reasons:

• Self employment
• Not covered by an employer
• Retired but not eligible for Medicare
• Not employed
• Insufficient group coverage
• College student status

Health Insurance, especially for families, is an essential part of life. Uninsured medical expenses are a leading cause of bankruptcy filings in America.

In addition, you never know when an illness or injury will strike.

For these reasons, not to mention peace of mind, you’ll want to consider individual medical insurance.

Understanding Individual Health Plans

There are two primary types of health insurance:

• Fee per service- This is where the patients are cared for by the doctor of their choice. The patient or the medical provider makes the claim and the patient pays the remainder of the cost.

• Managed care- Most Americans have a managed care plan. The most common types are Preferred Provider Organizations (PPO) or Health Maintenance Organizations (HMO).

HMO’s

HMO members have to select a primary care physician. If you want service from another doctor, you must obtain a referral form.

HMO’s can be less expensive than PPO’s but services outside the network can be more costly.

PPO’s

PPO’s are similar to HMO’s in structure. But members have more flexibility if they want to choose out of network services. Prescription drug plans might also be available with a PPO.

The premium for these plans tends to be greater than for an HMO.

Common Characteristics of Individual Health Plans

Deductibles- You will have a deductible to meet on your health policy. This can range from $250 to over $5,000 and can differ depending on the service being provided.

Coinsurance- Coinsurance is the amount of insurance you have to pay after the deductible is met. For example, let’s say you have a service performed that costs $6,000, you have a $1,000 deductible and your coinsurance is 20% of the next $5,000 worth of services.

In this case, you’d have to pay a total out of pocket expense of $2,000 for the $6,000 procedure– $1,000 for the deductible and $1000 which is your 20% share of the coinsurance.

Limits- Limits are separated into lifetime and individual. For example, lifetime limits might be $5,000,000 with and $100,000 limit per illness or injury.

Preexisting conditions- Carefully review what preexisting conditions are covered. Some might be covered, some may not or some may be covered after a waiting period (usually a year).

What’s covered- Individual medical plans typically cover semi-private hospital stays, surgical costs, doctor’s visits, outpatient charges, inpatient psychiatric costs, miscellaneous hospital and physician services, in patient prescription drugs and blood products, laboratory charges and radiology treatment and more.

What’s not covered- Cosmetic surgery or treatment, routine foot care, dental and vision, inpatient private duty nursing, acupuncture, experimental services and more.

You need to check the fine print of the policies to make sure you know exactly what is and what isn’t covered in your individual medical insurance policy.

Steve Wyrostek -MedicalInsurance.org Expert A 20 year plus veteran of the insurance industry, Steve managed departments in the personal and commercial lines areas of major insurers. He’s familiar with how insurance—ranging from boat to workers compensation—works.