If your job doesn't provide adequate insurance coverage, or if you're unemployed or self-employed, you may opt to find independent health insurance. While you may feel that you can't afford health insurance, it's important to find good coverage even if you're in challenging circumstances.
Independent medical insurance is typically more affordable than COBRA coverage. Look at several insurance companies and plans, and shop for the best coverage and price. Take the time to get several quotes and find a policy that will cover your current needs.
Learn more about private health insurance and how it works.
Before You Shop for Independent Health Insurance
When you shop for health insurance, it is important to remember the requirements set up by the Affordable Care Act (ACA). There are specific benefits that the policy must offer to qualify. To ensure you get a policy that offers the essential health benefits required by the ACA, purchase a plan through your state's Health Insurance Marketplace. While there was a federal tax penalty for not having health insurance, that penalty is no longer in place.
To enroll in a Marketplace plan, you must live in the U.S., be a U.S. citizen or national, not be incarcerated, and not on Medicare.
Open enrollment for ACA Marketplace plans starting January 1, 2021, ended in December. But in response to the COVID-19 pandemic, the Biden Administration announced a special enrollment period to run from February 15, 2021, through May 15, 2021. You are also entitled to a special enrollment if you have a significant life change, like getting married, having or adopting a child, or losing your health insurance through work.
Shop Online for Private Health Insurance
You can look for plans through your state's health insurance portal site or the federal website healthcare.gov. On these sites, you can see if you're eligible for an advanced premium tax credit (APTC). This tax credit is paid to your health insurance company and lowers the premiums you pay. It's based on your income, so it's important to be accurate when entering your income. Otherwise, you could owe taxes if you took large of a tax credit.
You can also directly visit the websites of local health insurance companies. They may have off-Marketplace plans that offer the minimum coverage required by the ACA. You can also visit private websites like ehealthinsurance.com to find coverage in your area.
If you have a preferred doctor, make sure he or she is in-network for the plan you choose. Otherwise, depending on the type of plan, you may have to pay more for visits or pay all the costs for seeing that doctor out-of-pocket.
While short-term health insurance plans might be tempting, keep in mind that they don't offer the minimum coverage required by the ACA and often have high deductibles and low limits on the amount they'll pay for benefits.
Find a Local Agent
You may also go to a local insurance agent in your area. Many companies have agents all over the country, and you can contact an independent agent who will have a wider variety of plans to choose from. If you use an agent, be sure that you fully understand the terms associated with the insurance.
One of the advantages of using an agent is that they can help you determine if the plan you want meets the qualifications for the Affordable Care Act. An insurance agent can help you decide exactly what you need and the best option from available plans. It can be helpful to have the extra input when shopping for your policy.
Take Advantage of Professional Associations
Take advantage of any associations that you may belong to. Often alumni organizations or professional organizations offer a discount on different insurance programs. If you belong to a guild or a union, you may find that you can purchase insurance through them as well. For example, the IATSE offers two national health insurance plans and notes that locals may also administer their own plans.
If you are under age 26 and single, consider staying on your parents' plan. You can offer to pay the difference in premium, but this may be a good option while you look for your first job.
Choose the Right Type of Policy
There are a variety of different policies available with different premiums and coinsurance amounts. It is important to take the time to choose the right health insurance policy for your needs. Your options include:
- High-end plans: These are gold or platinum plans if you're using the Health Insurance Marketplace. The insurance company covers about 80% to 90% of your costs, and you may have a lower deductible. These plans are best for those who frequently see the doctor, don't have the resources to pay a high deductible, or just feel more comfortable with comprehensive coverage.
- High-deductible plans: These plans have a lower premium because you pay more of your health care costs upfront. Your deductible is the amount you pay for covered services before your plan starts paying. You may be able to pair a high-deductible plan with a health savings account.
- Health savings account (HSA): This is a savings account you can open if you have a qualified high-deductible health plan. You can contribute up to $3,600 on a self-only plan and up to $7,200 on a family plan to an HSA in 2021. Your contributions are tax-deductible, and you can use the funds to pay for qualified medical expenses like prescription drugs. HSAs are similar to Flexible Spending Accounts (FSAs), but FSAs can only be opened through an employer, and there's a limit to how much you can roll over from year to year (if you're allowed to roll over funds at all).