If your employer does not offer a group plan or if you are self-employed or unemployed, you may need to buy an individual health insurance plan.
Most insurance companies offer a nice range of coverage options for individual plans; from the traditional fee-for-service plans to one of the numerous types of managed care plans. Incidental coverages like dental, vision and prescription drug are also available.
The final benefits are usually made up of a mixture of some or all of the following:
Before an individual policy is issued, the insurance carrier will evaluate the applicant to determine if they are an acceptable risk. Once an applicant is accepted, the final benefit, coverage, premium and eligibility issues are ironed out and the policy is issued as a contract between the applicant(s) and the insurance company.
Members of the plan will also be issued ID cards that provide the member’s name, identification, member, or group numbers as well as the insurance carrier’s telephone numbers and addresses.
Unlike a group plan where you can expect lower premiums because you have several members to share in the cost of health insurance, the cost for an individual plan is usually much more expensive. Due to the more stringent underwriting guidelines, individual plans can be more difficult to obtain at affordable prices if you have a chronic, serious or any medical condition with the potential to incur large costs.
The member is responsible for paying all premiums to the insurance carrier, usually on a monthly basis. Upon receipt of the premium, the insurance carrier will credit the member’s account and keep the coverage active. Failure to receive the required premium may result in withholding of claim payments or termination of the coverage.
The insurance company is responsible for maintaining correct eligibility, providing customer support and processing all claims in accordance with the provisions of the plan. Remember the plan is written and agreed to, by contract, between the insurance carrier and the member. When it comes to plan or benefit issues, think of the insurance carrier as more of the messenger than the message writer.
Every year, members with individual coverage may go through a renewal process. During this time the insurance carrier will look at the overall claim history, experience, etc., to determine if a premium increase is warranted.
A large amount of claim activity, could result in higher than average claim payments being made by the carrier. The carrier may pass this increase on to the member in the form of a premium increase. Although the insurance carrier may feel that a rate increase is warranted, the member has the final option to either dispute or accept the premium increase or they can shop for insurance coverage elsewhere.
Because of the difficulties in obtaining health coverage, members of individual plans have more of a tendency to stay with a current plan, even if the plan fails to provide adequate benefits, the premiums are high, and/or the insurance carrier fails to provide good service, timely processing and adequate reimbursement of claims.
Members of individual plans should not simply accept poor service, slow processing and inadequate reimbursement of claims. These types of claim issues do arise and most can be settled by contacting the insurance carrier to appeal or complain about the way you or your claim was handled.
Unresolved claim disputes or problems can be directed to the Department of Insurance (DOI) for that state. The DOI will work with you and the insurance carrier to get your issues resolved.