Private health insurance is an option available to you if your employer doesn’t cover you. Typically, businesses that have any number of employees tend to protect their employees’ insurance premiums. A premium is the amount of money you invest in an insurance company. When you buy into private insurance, you’ll need to cover these premiums yourself. As outlined in this link, private health insurance varies in cost quite a bit. You can choose a private health insurance provider based on your particular needs, thus making the process a little more complicated than just selecting a provider and going with what they suggest. In this article, we’ll look at the costs of private health insurance to the average buyer.

How Much Does Private Health Insurance Cost?

Understanding How Insurers Collect Money

Insurers have several methods that they can employ to collect money. Among these are:

  • Premiums: in private health insurance, you’ll be expected to cover the monthly premiums.
  • Deductibles: When you need to access your insurance, there’s usually a fee that you need to cover at first before the insurance takes over. This payment is known as the deductible.
  • Co-Insurance & Co-Payment: These costs are additional for any covered visit. Co-payments are usually fixed amounts, while co-insurance deals with a percentage of your overall bill.
  • Maximums: Occasionally, some policies offer you a maximum out-of-pocket cost. If you meet or exceed those costs, you no longer have to pay deductibles or co-insurance.

Each of these terms will vary by the insurance plan. Your options can go in one of several ways, either attempting to maximize your savings at the expense of your coverage or vice versa.

Who Needs Private Health Insurance?

Employees in the US are covered by their employers in most cases, and as such, don’t need to worry about private health insurance payments. However, there are several cases where someone may want to pay for their own personal insurance. Among these are:

  • A Young Person Who Just Turned 26: The Affordable Care Act (ACA) allows parents coverage to extend to children up to age 25. If a child is older than that, they need to get their own health insurance.
  • Unemployed: If you were previously employed, you might have the opportunity to continue your coverage under a Consolidated Omnibus Budget Reconciliation Act (COBRA). COBRA eligible payment usually requires you to pay extra costs while you were employed.
  • Part-Time Employees: Employers rarely, if ever, cover part-time employees with health insurance. As such, these employees would need to seek their own health insurance providers.
  • Self-Employed: If an individual is self-employed and their spouse is enrolled in an insurance plan, the coverage may extend to them. If not, then they will need to get their own private insurance plan.
  • Retired People: Once you retire, you won’t be eligible for coverage from an employer’s plan anymore. If you retire before age 65 and aren’t disabled, you’ll need to apply for private insurance. If you’re over 65, you can apply for Medicare. Many insurance providers offer specialized Medigap plans for individuals who find themselves in this position.
  • Your Existing Supplier Drops You: Under the ACA, your insurance provider can’t use a pre-existing condition to disqualify you from insurance, but if you made an error on your application or other circumstances beyond your control. Your health insurance may even become too expensive for you to cover the premiums. If any of these conditions occur, you will need private medical insurance.

The Pricing of Health Insurance Plans

Several providers for health insurance exist in the marketplace. The health insurance marketplace was established in 2010, thanks to the ACA, to allow individuals who need private health insurance to have a centralized location for providers. However, because so many people are used to having their employers deal with their private health insurance, it can be a daunting prospect to search for your own coverage. There’s an ingrained fear in many people that they’ll make the “wrong choice” in their insurance coverage. It may actually be easier to locate affordable health insurance coverage than you think.

Unfortunately, there’s also a misconception that private health insurance may cost a lot more than employer-covered plans. While this is a possibility, in some cases, it doesn’t necessarily apply to all circumstances. A study undertaken by the Kaiser Family Foundation noted that the average monthly premium for employer-sponsored plans stood at $603 for individuals and $1,725 for family plans. Private insurance plans averaged out at $440 for individual coverage and $1,168 to cover an entire family.

If you use the health insurance marketplace to purchase your individual coverage, you may be entitled to a Cost-Sharing Reduction subsidy. You may also qualify for Advanced Premium Tax Credits. Each of these may help to reduce your premiums and lower additional costs, such as your deductibles, co-insurance, or co-pays.

How to Find Private Health Coverage

All private insurers have their own websites that allow you to peruse their plans at your leisure. You can break down coverage based on your geographical location, the deductible you’re okay with paying, and the level of coverage you want. Private health insurers offer you a quote based on your choice, but the quotes are the lowest possible cost to you, provided that you are in perfect health. Until you actually sign up for the insurance plan and start paying premiums, you won’t be sure about what the cost to you will be monthly. The pricing, coverage, network, and other factors make it challenging to compare equivalent plans across providers.

When deciding on your provider, you should look at the things you need in your plan. Does the plan cover the cost of drugs? Can you get add-on dental and vision coverage? Do you get discounts on preventative care? If you’re buying insurance for yourself, these considerations are crucial for getting the best value for your money.