Individual Health Plan Types
Many health carriers sell policies to individuals directly, in
much the same way that personal automobile and homeowners insurance
is sold. An individual policy may cover the coverage purchaser only,
or extend to the person´s spouse and / or dependent children.
These policies can be a good option for people who do not work for
a company that offers a health plan, or are self employed, and are
unable to obtain coverage through another source.
When considering a health plan, be sure you understand the full
extent of the coverage that is included. If you have more than one
option, choose the one with the highest level of coverage you can
afford. The higher a plan´s deductibles, copays, and coinsurance,
the more you can usually save on premiums. However, you´ll
also have to pay more out of pocket for claims. Some of the most
common types of individual health policies include:
Major Medical
Also often referred to as comprehensive coverage, a major medical
policy provides benefits for most medical expenses, up to a certain
maximum amount whether an individual receives services in or out
of the hospital. The policy contract may contain coverage limits
on specific types of charges or treatment options, and will probably
contain provisions for deductible and / or coinsurance amounts,
which are amounts the insured person must contribute out-of-pocket
toward the cost of care. When used in a generic sense, the terms
"health coverage" and "health insurance" typically
refer to coverage under a major medical policy.
Short-term Major Medical
Provides comparable benefits to standard major medical coverage,
but for a policy period of generally less than one year. Short-term
major medical policies may be non renewable or have restrictions
on the number of times they can be renewed. These policies are most
often purchased by individuals who lose their major medical policy
for some reason in order to maintain coverage until a longer-term
health plan may be purchased again.
Basic Hospital
A limited benefit health policy that provides benefits for room
and board and miscellaneous hospital expenses. Such a policy generally
does not cover expenses related to emergency room care, surgery,
out patient treatment, or non-hospital related health services.
Basic Hospital Medical-Surgical
Provides the same coverage as a basic hospital policy plus a benefit
for emergency room care and surgery.
Accident only
Provides coverage for injury from an accident only and excludes
sickness. Benefits may be paid for death, disability, dismemberment,
or hospital and medical expenses.
Disability Income Protection
Also sometimes called loss of time insurance, the coverage provides
periodic payments to replace income actually or presumptively lost
when the insured is unable to work as a result of sickness or injury.
In general, individual policies cost more, and may cover fewer
conditions, than membership in an employer sponsored plan or other
group coverage. Group plans achieve lower rates by spreading the
risk of claims over a greater number of people. Add the fact that
employers often contribute 50 percent or more toward worker´s
plan costs, and the price of an individual policy can seem even
more expensive by comparison. Purchasing coverage individually has
one significant advantage, however; Group coverage tends to be "one
size fits all" for all group members. By shopping carefully
and negotiating with carriers, the individual purchasers can obtain
a policy that´s extremely well suited to their particular
coverage needs.
Before purchasing any individual health plan, it is important to
verify that the carrier and agent are licensed. Verifying that the
carrier is licensed protects you against fraud. In addition, a state
guaranty association will pay some or all of the claims of a licensed
carrier should it become insolvent. If you buy from an unlicensed
entity, you may have to pay the costs of any claims yourself. For
many health care services, this cost could be significant.
"Individual Health Plan Types" Texas Department of Insurance,
(10 Aug. 2006)
http://www.TexasHealthOptions.com<http://www.texashealthoptions.com
/cp2/individualplans.html>
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