Individual Health Insurance

What is individual health insurance? It's a plan that individuals purchase directly from a health insurance company, independent of a group or employer.

Who Uses Individual Health Insurance?

Individual health insurance plans are definitely not the norm; in 2002, as calculated by the Kaiser Family Foundation, these plans made up only 6.6 percent of the population under age 65. President Bush and other policy figures have proposed different ways to make individual insurance plans more affordable and thus accessible, to people to decrease the number of uninsured.

There is some turnover in individual plans, as some people stop their coverage if they get a job and employer health insurance. However, many purchasers of individual health insurance are long-term self-employed, retirees, or people working at jobs without health benefits, according to a joint study by Kaiser and eHealthInsurance.

What to Keep in Mind When Considering Individual Health Insurance

There are some important factors to consider when making plans for your own individual health insurance. Those who choose individual plans over group plans will probably save money. According to this study, premiums for individual health insurance plans are much lower than average premiums for group health insurance: single group plan premiums were 48 percent higher than individual health insurance premiums, and family group premiums were 64 percent above that of individual family plan premiums.

One reason for these numbers could be that younger purchasers tend to use individual plans. Thirty-six percent of individual plan are purchasers are over age 35, while 64 percent of group plan purchasers are over 35. The lower prices of individual health insurance plans also may reflect a more modest benefit package, something else to keep in mind. Federal tax policy makes it possible for employers to offer more generous benefit packages to employees.

Those considering whether to sign up for individual health insurance plans should also pay attention to the deductibles and cost-sharing amounts for each level, as these do vary. They should also keep in mind that individual plan premiums vary around the country. Premiums with individual plans increase with age and tend to be more expensive in the New England region. In general, consider your individual and family situation with regard to age, health needs, and budget when assessing individual health insurance .

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