What Is Private Health Insurance?

Having no health insurance is a problem that many people in the United States face due to the high cost of private health insurance. Health insurance coverage pays for medical costs such as doctor visits, surgery, prescription drugs and sometimes even dental costs. In many cases health insurance is included in employers’ benefits packages. The employer pays part of the cost and rest is paid in deductions taken from the employees’ paycheck.

In some cases employers are not able to provide their employees with health insurance. If you’re in this situation, you may want to purchase your own health insurance through a private health insurance company. In a few states, you are subject to a tax penalty if you do not have coverage for the year.

A private health insurance policy is health insurance coverage that is offered through a private company rather than a state or federal government. You can purchase private insurance from the marketplace. With private insurance policy your costs are split in two parts, with your insurer paying half and you paying the rest. The extra fees you pay are known as cost-sharing which usually come in the form of deductibles, copays and coinsurance.

Private health insurance plans are different from public ones, like Medicaid and Medicare, and come in various types. For example, you can choose between an HMO or a PPO. Other less common examples of private insurance are catastrophic coverage or short term coverage. Catastrophic coverage is a plan that offers very limited coverage for those under the age of 30 who qualify for hardship exemption (an event that prevents an individual from signing up for health insurance) and cannot afford health insurance. Short-term health insurance is a short term plan that allows the users to have the flexibility to get coverage for a certain period of time, usually less than a year.

Who Needs Private Health Insurance?

Not everyone qualifies for health insurance through the government or their employer so here are the categories of people that may need to purchase private health insurance:

If you just turned 26 years old, are unemployed, self-employed, working part time, starting a business that has employees, or have recently retired.

If you are unable to enroll in an employer sponsored health insurance plan.

How to Buy Private Health Insurance?

Public health insurance members are usually enrolled in Medicare and Medicaid. Medicare is a federal insurance program for individuals who are of the age of 65 and older, individuals with disabilities and people with certain end-stage diseases. Medicaid is health insurance for low income Americans and has no age limits. If you are not able to receive health insurance through one of these forms or through your employer then you will have to buy private health insurance. Purchasing your own health insurance can be complicated because there are many options to choose from based on price and coverage. Here are some tips to help you.

Where Can I buy Private Health Insurance?

For those who are soon to be retired, a good place to start searching for private insurance would be Medicare Advantage, if you qualify for Medicare.

When the Affordable Care Act was created it also created the health insurance marketplace. Buy an individual or family health plan at the best rates.

How Much Does Health Insurance Cost?

Because of the Affordable Care Act, insurance companies are no longer allowed to deny customers health insurance based on pre-existing conditions. Under the Affordable Health Care Act also required the health insurance companies to offer coverage according to four metal categories. This tier system offers the insured different coverage levels, and people should pick a tier depending on their projected medical needs for the year. The tiers are also based on the percentage of healthcare costs the plan pays and the portion you pay out of pocket in the form of deductibles, copayments and coinsurance.

Look for a New Health Insurance Plan

The four categories in the tier system are bronze, silver, gold, and platinum. The bronze plan has the least amount of coverage, 60% of your total health care costs. This would leave you to pay 40% out of pocket. The silver plan covers more of the health care bill, 70%, while you pay the remaining 30%. The gold plan provides an even higher coverage with around 80%, leaving you to pay 20% out of pocket. The highest coverage is the platinum plan, which is not available in every state. A platinum plan covers 90% and leaves you to pay 10% out of pocket.

The more coverage you have from your plan, the higher the cost of the monthly premium and the less you pay out of pocket. So, the platinum coverage has the most expensive monthly premium while the bronze plan has the lowest monthly premium. In a study done by eHealth, the average price for a bronze plan was $440, silver was $481, gold was $596, and platinum was $706. Most Americans elect the silver plan.

Private health insurance prices can be compared through licensed agents, through employers, or through government marketplaces.

How Can I Save Money on Health Insurance?

You may be eligible for subsidies to reduce the cost of the premium:

• If your Household has two people and income less than $67,640
• If your Household has three people and income less than $85,320
• If your Household has four people and income less than $103,000
• If your Household has five people and income less than $120,680

You can also get the best rates by comparing plan prices near you. Just enter your zip code below.