Advice on Buying Individual Health Insurance at a Group Rate

When you’re buying health insurance as part of a group plan at work, it’s normally at lower rates on premiums. If you’re self-employed or between jobs, a group health plan may not be an option. If you start another job which does not offer health insurance, or work as an independent consultant, you’ll more often than not notice a sharp rate increase when you buy individual health insurance.

While individual health insurance plans are purchased directly from carriers, leaving out the employer middle man, they do not offer the fuller range of benefits and lower rates associated with the typical workplace group plan. However, individual plans may cover you, your spouse, and your children. The two other main methods to get an individual health insurance plan when you’re not fully employed with a group health plan are to obtain either “short-term” and/or “catastrophic” coverage.

Individual plans are “medically underwritten”, which means the insurer may reject your application, if you have existing health problems. Some states don’t allow this practice and require that insurance carriers offer you a policy, no matter what your medical condition. A list of “Guaranteed Issue Laws” has been published by the Kaiser Family Foundation, so do your homework before you let a carrier reject your desired policy application, or make exclusions to it.

Even though people enrolled in individual health insurance plans pay more as they grow older and more prone to illness, don’t let that tempt you into to going without coverage. Even if you’re healthy you could have a serious or near-fatal accident and be forced in “medical bankruptcy” as so many millions of others are each year.

It’s important for you to keep in mind that you’ll lose your rights to coverage of pre-existing conditions if you go without insurance for 63 days or more, a time period set by the Health Insurance Portability and Accountability Act (HIPAA).

If you’re uninsured and have a “pre-existing condition”, you may feel like a reject from the health insurance market. It may seem to be impossible or unaffordable. But there are practical ways you may be in a position to manage to get coverage.

Remember to do your homework, because in some states, the self-employed, sole proprietor can be eligible to buy health insurance as a “group of one” – even a home-based businessperson – just as long as you’ve been in business for at least 30 days.

You might qualify for a group rate if you own a business and have at least one partner or employee, even if you live in a state that does not offer these “group of one” insurance policies. For example, does your spouse do some bookkeeping or any other business-related tasks for your company? That setup qualifies you as a two-person business, and therefore makes you eligible for a group rate policy.

Let’s say you’re planning on leaving an employer where you have a group health plan. Simply ask the insurer to convert it to an individual health plan. The rate will, of course, be higher than your group plan, but at least you’ve secured your health insurance if you have medical conditions. Another option to check on: if your spouse has a group plan at work, you might be able to be added on to it.

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