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Families and Individuals 2012-06-30T20:21:13+00:00

Families and Individuals

Individual, or family, health insurance is also commonly known as personal health insurance or private health insurance. Most insurance companies offering it will refer to it as individual health insurance. Family health insurance, where an individual, a spouse and children are all on the same plan, is still referred to as an individual health plan. This is the type of policy one would purchase for themselves and their family if an employer does not provide insurance benefits to its employees. A person may also consider family medical insurance if they are self-employed, unemployed or a student. Individual and family health insurance plans are available for newborns on up to the seniors at age 65. Once a person turns 65, they become eligible for Medicare and Medicare supplemental insurance, and must forfeit their individual medical insurance policy.

How are individual health insurance plans different?

The qualifications and regulations that govern individual medical insurance vary from state to state and from one insurance company to another. In all states, the primary difference between group (those plans offered through an employer) and family health insurance is that the health plans available to individuals and families are not guaranteed issue. This means that the private health insurance company may turn you down for coverage based on pre-existing medical conditions or they may approve you for medical insurance coverage but exclude benefits for treatments associated with your pre-existing condition. This is what is referred to as an “exclusionary rider,” which is an addendum to the standard benefits offered under the health plan that you have selected. Some states do not permit insurance companies to place exclusionary riders on individual health insurance policies and the 2011 Affordable Care Act will virtually eliminate these by 2014.

What individual health insurance plans are available?

Under the individual and family health insurance product category, there are several different types of private health insurance plans available, such as indemnity (fee-for-service) health insurance, health maintenance organization (HMO) plans, preferred provider organization (PPO) plans, point-of-service (POS) plans, and health savings account (HSA) plans. Each plan type differs on two major features: cost and choice. Typically, the more freedom you want in choosing your own doctor and hospital, the more expensive the plan will be. When selecting what type of health plan is best for yourself and your family, you should compare health insurance quotes for each health plan type and shop carefully because coverage and costs vary from company to company and between various plan types.

It is widely expected that state/federal healthcare exchanges that pool individuals and their families to facilitate competitive access to health plans, will become widespread by 2014 and the full enactment of the Affordable Care Act. This combined with elimination of exclusionary riders and the requirement that all U.S. citizens purchase health care coverage will increase the markets for individual and family coverage.