See if getting covered with individual private insurance is right for you.
Have you heard the term “private health insurance” thrown around but never really understood what it meant? In the world of health insurance, there’s a lot of industry-related jargon that can make understanding what you’re looking for pretty hard—especially if you have to get affordable health insurance on your own, instead of through an employer. If you’re looking for an individual or family plan on your own, read on to learn more about private health insurance and whether or not it’s what you are looking for.
Definition of private health insurance
Private health insurance is really just health insurance that isn’t marketed by government-run agencies. These health insurance plans can be bought through private health insurance companies, health insurance agents, or online brokers like eHealth.
You might also hear a private health insurance plan referred to as an “off-exchange” plan, meaning it was not purchased on the federal health insurance marketplace, or on any of the state exchanges created under the Affordable Care Act (ACA).
Who gets private health insurance plans?
According to the Kaiser Family Foundation, 49% of Americans get their health insurance through employer-sponsored insurance as a benefit. So if you’ve ever had insurance through your job, or through someone else’s job as a dependent, then you’ve probably been enrolled in private health insurance.
Private health insurance doesn’t have to come from an employer-sponsored group health insurance plan, though. Some people decide to buy individual health insurance directly from health insurance companies, local health insurance brokers, or online health insurance marketplaces like eHealth.
Why buy private health insurance?
When you buy a family or individual health insurance plan on a private health insurance market, there are some perks you can benefit from.
For example, eHealth gives you access to instant online quotes. You get to see the prices of plans from a huge variety of health insurance companies, and you get to compare them all at once. If you live in a rural area, you might have fewer choices. We may have more plans than the state exchanges, and our plans and premiums cost the same as they would on any other platform—eHealth does not cost extra despite the additional services we provide. You’ll also find that our website is easy to navigate, and designed to make your private health insurance shopping simple.
We have a call center with licensed representatives and health insurance agents who can get back to you quickly and make the process of signing up for health insurance easy to understand. Our licensed agents specialize in your market (individual and family), so they have the eligibility and product knowledge that you might not find from a local broker or someone representing a government exchange.
Is private health insurance cheaper?
As always, this question can’t be answered in black and white. Everyone’s case is different, and due to Obamacare subsidies, premium tax credits, and varying plans, some people may find that they can get more affordable health insurance off-exchange.
In late 2017, eHealth published an analysis of released 2018 health insurance costs, and found that for families who only slightly miss the Obamacare subsidy cutoff, health insurance may simply be unaffordable (29% of their household income). This issue is often referred to as the “subsidy cliff” and it means that you or your family are just slightly above 400% of the federal poverty level (FPL) and therefore, may not qualify for subsidies (which usually help to pay the cost of health insurance premiums). See the graph below, which shows the price difference in insurance premiums after a $200 increase in your household income if your income is at the subsidy threshold level.
|Average monthly premium with no subsidy
(if you make 401% of FPL)
|Average monthly premium after receiving minimum subsidy
(if you make 400% of FPL)
As you can see, an increase of only 1% in your income could result in hundreds of dollars more in monthly premiums.
So in some cases (especially if you earn too much to qualify for Obamacare subsidies), buying private health insurance might be more affordable for you. In eHealth’s case, we have one of the largest online selections of insurance plans, and we even offer off-exchange plans that are Obamacare (or ACA) compliant. This may help you avoid a tax penalty for not having health insurance in 2018. Under current law, after 2018 you will not face penalties for being uninsured. The availability of so many options on the private health insurance market may result in you finding affordable family or individual health insurance, even without subsidies.
This article is for general information and may not be updated after publication. Consult your own tax, accounting, or legal advisor instead of relying on this article as tax, accounting, or legal advice.
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