Buying health insurance for you and your family

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Buying health insurance for you and your family

Shopping for health insurance? You're not alone. Millions of Americans buy their own health insurance each year. Some are self-employed or unemployed. Many are early retirees or people who work for companies that do not offer health insurance benefits. Here are some pointers to help you navigate the individual health insurance market and choose the right plan.
 
What types of health coverage are available? As in the group health insurance market, people can choose from traditional indemnity or "fee-for-service," health plans, health maintenance organizations, preferred provider organizations, and point-of-service plans.
 
How much will it cost? Premiums for individual or family health insurance vary widely across the country and by the age of the purchaser. In general, older purchasers pay more than younger people. Coverage in certain parts of the country may cost more on average than in other parts of the country. Family premiums tend to be higher than single person premiums but not proportionately so. Based on a national sample of policies sold from January to August 2003, the average monthly premium was $148.80 for individual coverage and $277.62 for a family policy.
 
What about out-of-pocket expenses? Cost-sharing options vary significantly. You may prefer a plan with a low deductible -- less than $500. Or, you could opt for coverage with a lower monthly premium that requires the policyholder to pay out the first couple thousand dollars before the plan begins to pay for medical expenses. Co-payments vary, too, although a majority of health insurance plans require co-payments of less than $30.
 
Want to get more for your money? You might consider buying a high-deductible health insurance plan linked to a health savings account, or HSA. Some experts say this is a good option for people who buy their own health insurance because such plans may have lower monthly premiums than traditional health insurance plans and contributions to the savings account are tax deductible up to a certain amount.
 
Who's insurable? In most states, insurance companies that offer individual insurance plans require applicants to submit a medical history. In some cases, these insurers may require a physical exam to assess the risk of future medical claims. As a safety net for people who are denied private coverage because of a medical condition, more than half of all states maintain high-risk health insurance pools. However, this coverage is typically more expensive than coverage offered through private insurance companies.
 
SOURCES: Oct. 23, 2002, Health Affairs; Agency for Healthcare Research and Quality, Rockville, Md.; The HSA Insider, Washington, D.C.; Update on Individual Health Insurance, Kaiser Family Foundation/eHealthInsurance, August 2004 (revised)
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