Individual health insurance is coverage purchased by a person rather than provided through an employer-sponsored group plan. It can be useful for people who are self-employed, between jobs, retired before Medicare eligibility, working for an employer that does not provide health benefits, or otherwise seeking coverage independently. In the United States, individual health insurance can be purchased through the Affordable Care Act (ACA) Marketplace, directly from insurers in some circumstances, or through other qualifying coverage programs. Costs and eligibility depend on factors such as age, location, household income, plan type, and eligibility for financial assistance
Individual health insurance provides financial protection against covered medical expenses.
Depending on the plan, coverage can include:
The exact benefits, provider networks, deductibles, copayments, and coinsurance vary by plan.
ACA Marketplace plans must cover essential health benefits and cannot deny coverage or charge higher premiums because of pre-existing conditions.
Individual coverage can be particularly relevant for people who do not have access to suitable employer-sponsored insurance.
Common situations include:
Eligibility depends on the type of coverage and the person's circumstances.
The ACA Marketplace is one of the primary ways people purchase individual and family health insurance.
Marketplace plans are offered by private insurance companies and must follow federal requirements.
The Marketplace also provides an application process that can determine eligibility for:
HealthCare.gov states that household income and family size are important factors in determining eligibility for savings.
The monthly premium is the amount paid to maintain the insurance policy.
However, the premium is only one part of total healthcare costs.
Other expenses can include:
The deductible is the amount generally paid toward covered services before the insurer begins paying according to the plan's cost-sharing structure.
Some services may be covered before the deductible.
A copayment is a fixed amount paid for a covered healthcare service.
For example, a plan might require a set copay for a primary-care visit.
Coinsurance is generally a percentage of the allowed amount for a covered service after applicable deductible requirements are satisfied.
The out-of-pocket maximum limits the amount paid for covered services during a plan year under applicable plan rules.
Once the limit is reached, the plan generally pays 100% of covered essential health benefits for the remainder of that plan year.
There is no single price for individual health insurance.
Premiums can vary according to:
For ACA Marketplace coverage, premium tax credits can substantially reduce the monthly amount paid by eligible households.
Premium tax credits are designed to reduce Marketplace premiums for eligible households.
The amount of assistance is based primarily on household income, household size, and the cost of applicable Marketplace coverage.
Because income can change, an application should be updated when there is a significant change in expected household income.
Incorrect income estimates can affect the amount of financial assistance received and may result in tax reconciliation.
Some Marketplace applicants may qualify for additional savings known as cost-sharing reductions.
These can reduce expenses such as:
Cost-sharing reductions generally require enrollment in a Silver Marketplace plan.
Therefore, the lowest-premium plan is not necessarily the least expensive overall for someone who qualifies for these savings.
ACA Marketplace plans are divided into metal categories.
Bronze plans generally have lower monthly premiums and higher cost sharing when healthcare services are used.
They can be suitable for people who prioritize lower monthly premiums and expect relatively limited healthcare use.
Silver plans generally have moderate premiums and cost sharing.
They are particularly important for people who qualify for cost-sharing reductions.
Gold plans generally have higher premiums but lower cost sharing when covered services are used.
They may appeal to people who expect more frequent medical care.
Platinum plans generally have the highest premiums among standard metal categories but lower cost sharing.
The appropriate metal level depends on expected healthcare use and overall financial circumstances.
Health insurance plans typically use networks of doctors, hospitals, clinics, and other healthcare providers.
Network structures can include:
A plan's network can have a major effect on healthcare costs.
Before selecting a policy, it can be useful to verify whether preferred doctors, hospitals, specialists, and healthcare facilities participate in the network.
Prescription coverage varies among insurance plans.
Insurers commonly use formularies that place medications into different cost-sharing tiers.
Before selecting coverage, checking commonly used prescriptions can help identify potential medication expenses.
Some plans may require:
These requirements can differ even among plans from the same insurer.
ACA-compliant Marketplace plans generally cover certain preventive services without cost sharing when provided by an in-network provider and when applicable requirements are met.
Preventive services can include certain:
The exact services and coverage requirements can change as federal recommendations are updated.
One of the major protections associated with ACA-compliant individual coverage is protection for people with pre-existing conditions.
Marketplace insurers generally cannot:
This protection is especially important for people managing chronic illnesses.
ACA Marketplace coverage generally has an annual Open Enrollment period.
For HealthCare.gov, Open Enrollment generally runs from November 1 through January 15.
Coverage can sometimes be obtained outside this period when a person qualifies for a Special Enrollment Period.
Certain life events can create a Special Enrollment Period.
Examples include:
The enrollment window and documentation requirements depend on the qualifying event.
Losing employer-sponsored coverage can create several potential paths.
Depending on circumstances, a person may consider:
Marketplace coverage may provide premium tax credits for eligible households, while COBRA generally allows continuation of the existing employer plan but can involve paying the full premium plus an administrative fee.
Self-employed individuals can purchase individual or family coverage through the Marketplace.
Because self-employed income can fluctuate, estimating annual household income can be more complicated.
Income estimates should be updated when circumstances change.
Depending on income and family circumstances, an applicant may qualify for premium tax credits or Medicaid.
People who retire before becoming eligible for Medicare often need another source of health insurance.
Potential sources can include:
ACA Marketplace coverage can be particularly relevant for early retirees because financial assistance may be based on household income.