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Buying Individual Health Insurance Can Be Scary: 7 Things to Know

scaryThe ACA introduced new changes that greatly benefit individuals and individual health insurance. These ACA changes make individual health insurance a better and more affordable way to insure yourself, your family, and your employees.

Although individual health insurance is easier to access and more affordable than ever, some people are still unsure of how to go about selecting an individual health insurance policy. This article answers common questions about individual health insurance, including how it has changed and how to purchase it.

Tip: This article is an excerpt from our new eBook “Affordable Care Act 101.” Download the free guide here.

What is Individual Health Insurance?

Individual health insurance is a policy you purchase for you and your family through a licensed health insurance agent, who is appointed to represent the insurance carriers, or through the Health Insurance Marketplace in your state. It works just like car insurance.

Where Can I Buy It?

Buying health insurance is now easier than ever. You can buy health insurance from:

  • The ACA Health Insurance Exchange (“Marketplace”) in your state

  • A licensed health insurance agent or broker

  • Directly from an insurance company

Tip: To access the health insurance discounts (premium tax credits), you need to purchase a plan offered on your state’s Health Insurance Marketplaces.

What Are the Health Insurance Marketplaces?

The Health Insurance Marketplaces are new websites where you can shop, compare, and enroll in an individual health insurance plan. Each state has a Marketplace that is either run by the state (ex: CoveredCA.com), or the federal government (HealthCare.gov). The Marketplaces are intended to make shopping for health insurance easier and give you access to the premium tax credits. Look up your state’s website here.

What Has Changed About Individual Health Insurance?

While individual health insurance plans are not new, the ACA creates three new advantages that make individual health insurance just as good – if not better – than traditional group health insurance. The new advantages are:

  • Coverage for a pre-existing condition (you cannot be denied coverage or charged more because of a medical condition).

  • Coverage of essential health benefits (a core set of health benefits and services).

  • Discounts, via the premium tax credits (which lower the cost of premiums for eligible individuals).

How Much Does It Cost?

On average, individual health insurance costs less than group health insurance. The amount you will pay for health insurance depends on these factors:

  • Your location (state and county)

  • Your age

  • Your tobacco use

  • Eligibility for federal assistance (the premium tax credits or Medicaid)

  • The plan you select (carrier, network of providers, and level of coverage)

When Can I Enroll?

You can only enroll in individual health insurance during a specific annual open enrollment period, or during a special enrollment period. The purpose of these enrollment periods is to control costs - it keeps people from waiting until they get sick to purchase health insurance.

The annual open enrollment period for coverage in 2015 begins November 15, 2014 and extends through February 15, 2015. During this time, you can purchase any health plan available on the individual market, or change your health plan.open_enrollment

What Happens If I Miss Open Enrollment?

If you do not purchase health insurance coverage during the annual open enrollment period, you will be unable to purchase coverage until the following year unless you qualify for a special enrollment period.

You are eligible for a special enrollment period if you have a qualifying life event such as marriage, divorce, birth or adoption of a child, you move to a new state, or you lose job-based health insurance. The special enrollment period generally lasts 60 days after the qualifying event (see this article on special enrollment periods).

If you miss the deadline for open enrollment and you do not qualify for a special enrollment period, there are short-term health insurance policies that can help. However, you may still have to pay the Individual Shared Responsibility Fee for not having minimum essential coverage.

Like infographics? See How to Buy Individual Health Insurance in 4 Easy Steps.

Do you have any questions about individual health insurance? Leave a comment below.

 

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