How to Buy Health Insurance on Your Own Through Marketplaces
People often get health insurance through their jobs. But jobs don’t always offer health insurance coverage or you may be self-employed.
In these cases, you may be wondering how to buy health insurance on your own.
While health insurance is complicated, you can buy coverage by yourself or with the help of a health insurance broker or agent.
This applies whether you’re looking for plans for individuals or families.
Here’s what you should know about the process before you get started.
When Can You Sign up for Health Insurance?
In general, you can sign up for health insurance during one of two times.
The usual time is called an open enrollment period.
In some rare cases, you may qualify for a different enrollment time called a special enrollment period.
Open enrollment period
Open enrollment is the time anyone can sign up for health insurance for the following year.
If you miss the period, you have to wait until next year to sign up for health insurance for the year after. The exception is if you qualify for a special enrollment period.
The open enrollment period usually starts in November of the end of the calendar year before a health insurance plan takes effect.
For example, open enrollment for health insurance for 2021 started November 1, 2020 and ended December 15, 2020
Special enrollment period
Special enrollment periods allow you to sign up for health insurance at a time other than open enrollment.
To qualify, you must meet specific requirements.
You may qualify for one of these periods if you have:
- Changes in your household
- A change of residence
- You lose health insurance
- Your employer offers to help with coverage costs
- Certain other situations
You can learn more about open enrollment periods here.
Where to Look for Individual Health Insurance Coverage
Your options for health insurance coverage partially depend on where you live.
Here are a few options to help you find a plan that fits your needs.
Healthcare.gov is the health insurance marketplace for the majority of states. This website was set up as a part of the Affordable Care Act (ACA).
The site shows you plan options based on the criteria you specify and your state.
It can also help you determine if you may qualify for a premium tax credit.
You can directly compare plans you’re interested in, too.
Some states run their own health insurance marketplaces.
In these cases, you can’t use Healthcare.gov. Instead, you can shop for health insurance on the state’s marketplace website.
States that run their own marketplaces include:
- District of Columbia
- New Jersey
- New York
- Rhode Island
Health insurance brokers
Navigating Healthcare.gov or your state’s health insurance marketplace can be confusing.
This is especially true if you aren’t a health insurance expert. Unfortunately, that’s the majority of Americans.
Health insurance brokers can help find a health insurance plan to fit your family’s needs. They work with several insurance companies, unlike an agent that only represents one company.
Working with a broker with access to several companies can help you find a better deal than only shopping with one insurance company.
The plans brokers have access to often include plans on state health insurance marketplaces or Healthcare.gov.
However, you get advice from an expert to help you find the best plan for you.
Health insurance brokers get paid by the insurance companies, not you.
They may be incentivized to get you to sign up for one plan over another.
Brokers may not work with every health insurance company. Chances are they won’t recommend a policy from a different provider they don’t get a commission from.
That’s why it’s still smart to shop on your marketplace when working with a broker. That way, you can compare all of your options before picking the one that’s best for you.
How to Compare Health Insurance Policies
Whether you shop yourself or use a broker, you need to know how to compare health coverage options when choosing a plan.
Plans offer a wide variety of features. Here are some of the key features you should know.
Premiums are the monthly cost of your health insurance plan. Unsubsidized premiums can be expensive depending on the plan and where you live.
You may qualify for a premium tax credit to lower the cost. You can get an advance of the tax credit to lower your monthly premium payment in some cases.
If you qualify for an advance premium tax credit, the premium shown may already reflect the credit.
Be careful about doing this, though.
If your income ends up higher than you expect or other aspects of your situation change, you may have to pay back some of the advanced tax credit amount when you file your tax return.
The good news:
If the actual tax credit is larger, you’ll get a bigger refund or smaller balance due.
A network is the group of providers the plan works with. The health insurance company has contracts with these providers.
This allows the plan to get services at rates they feel are acceptable.
Your plan may have different costs associated with in-network visits and out-of-network visits.
Since out-of-network providers don’t have contracts with your plan, expect the costs to be much higher.
Additionally, plans usually require you to foot more of the bill if you choose an out-of-network provider. You may have to pay a larger copay or a higher coinsurance rate.
Check the network the health insurance plan uses to make sure it includes the medical providers you want to use.
A deductible is an amount you have to pay for covered services before your health insurance plan starts paying.
Your plan may have several different types of deductibles.
For instance, you may have an individual deductible for each person on the plan.
Then, you may have an overall family deductible. You may have a separate deductible for prescription drug coverage, too.
The higher your deductible is, the more you must pay before your insurance kicks in. The benefit is higher deductible plans often have lower monthly premiums.
Certain services may not be subject to the deductible.
Preventative benefits, such as certain types of screenings, may be covered regardless of whether you’ve met your deductible.
The out of pocket maximum is the most you have to pay in a plan year for covered services.
Once you reach this limit, your health insurance plan covers 100% of future costs for the rest of the year. This calculation does not include premiums you pay.
There are a few keys to understand about this concept.
First, it only includes covered services. Non-covered services won’t be covered just because you hit your out of pocket maximum.
Next, it doesn’t include out-of-network care or services. If you choose to use out-of-network providers, you do so at your cost based on what the plan states.
In the 2021 health insurance plan year, the highest possible out of pocket maximum for marketplace plans is $17,100 for family plans or $8,550 for individual plans.
Plans may offer lower out of pocket maximums if they wish. The lower the out of pocket maximum is, the higher the premium will likely be.
Copays, also called copayments, are a fixed fee you pay for covered services. This concept only applies after you’ve reached your deductible.
Your plan may have different copays for different services.
A primary care visit may have a $30 copay, an emergency room visit may have a $150 copay and a specialist visit may have a $50 copay.
Coinsurance is like a copay but uses percentages instead of fixed amounts. It only kicks in after you’ve met your deductible.
You may be responsible for 20% coinsurance on primary care visits and 50% coinsurance on emergency room visits. In these cases, you’d pay the percentage of the bill based on the visit type.
What to Expect After You’ve Chosen a Plan
Whether you’re buying individual health insurance or family health insurance, you should understand what happens after picking a plan.
As long as you’re buying a health insurance plan through an ACA marketplace, there aren’t any medical exams. That’s because preexisting conditions are covered under the ACA.
You pick a plan and pay the first premium payment.
Then, coverage kicks in on the start date, usually January 1 of the new year.
If you’re enrolling using a special enrollment period, make sure you understand when your coverage will start.
If you’re unsure, call the health insurance company you’ve chosen to ask.
Insurance for medical care is essential. A nasty accident or medical condition could result in huge bills without insurance.
If you don’t qualify for group health insurance, chances are you’ll be shopping for an individual health insurance policy on your own.
Now that you understand when you can get health insurance, your options on where to get it and health insurance terminology, you can find the best plan for you.
Carefully consider your health care needs and what the plan covers before signing up.