When you receive your health insurance benefits through an employer, it will seem so easy to qualify for coverage and to choose the best policy for your situation. However, once you leave the protected confines of an employer plan (if you are laid off or become self-employed), you may be shocked to learn about the overwhelming restrictions now facing you. Many people find it extremely difficult to purchase reasonable healthcare coverage on their own. If this is your task, here are some tips to help you navigate the complicated and worrisome world of private health insurance.

 

1. Start early. When you know you'll be needing new health coverage in the near future, begin your research at least 60 to 90 days before the new coverage is to begin. As you start researching and applying for potential plans, you may get the nasty surprise of being turned down for coverage. Unlike an employer-sponsored plan, in the world of private health insurance, an insurance company can simply refuse to cover you for any number of health situations. You don't want to learn about this just before your existing coverage is due to expire!

2. Cover children under other spouse's employee plan. Private insurance options are almost never as comprehensive or as affordable as the health benefits provided under an employer-sponsored plan. If either you or your spouse has access to health coverage through an employer, even when the parents are divorced, you should definitely research the terms of this coverage. Don't be afraid to cover family members under different plans in order to find the best health care coverage for each family member.

3. Consider routine vs. emergency coverage. As you begin comparing plans available to individuals and families, take a moment to consider your priorities for future healthcare. For example, does it make sense to have a $0 co-pay for office visits (saving you perhaps $50 per year), but with restricted hospital coverage for dealing with car accidents or the onset of a serious disease (possibly putting your life or savings at extreme risk)? It's not hard to see which benefits the insurance companies will play up in their sales materials!

4. Understand medical underwriting. Ahhh, here's the best kept secret in purchasing private health insurance. When a plan discusses the need for medical underwriting of the policy, they intend to screen your medical history (including covered family members) for any indications of problematic health conditions. Now, please be aware, they are not just screening for serious conditions. Rather, they are attempting to screen out all policy holders who might ever require significant health care. For example, if your weight is too high, you may be denied coverage! Obviously, if you or a family member has a serious issue such as heart disease, diabetes, asthma, a disability, etc., then you can assume health insurance will either be denied or that coverage will be offered for all health care except for the specific health issue (known as a waiver of coverage for a specified condition).

5. Research state sponsored plans. Because of the numerous restrictions experienced by consumers in pursuing individual healthcare coverage, many state governments have stepped in to offer reasonable plans and health coverage for their citizens. These plans may cover children, low income families, the self-employed and small businesses, or the hard-to-insure (known as a risk pool). These plans are not strictly limited to low-income families as you might assume, so take the time to see what your state government has in place for people just like you.

6. Read the fine print. When you zero in on a health insurance plan you like, take the time to read the fine print. All insurance policies have restrictions and exclusions, and they will hold you to every comma in the policy. You'll want to understand what services are covered or excluded, if there are waiting periods, and what doctors, specialists or labs you'll be authorized to visit under the plan.

7. Never cancel prematurely. Health insurance coverage is closely regulated by Federal and state laws which have put various protections in place for consumers. These protections are often negated when you willingly cancel a policy in writing. For this reason, and due to the various complications noted throughout this article, you should always have your new confirmed coverage in place before canceling any existing policies.