With health reform, there are new advantages to individual health insurance for both employees and small businesses. These new advantages are shifting more individuals towards buying individual health insurance plans, and more small businesses towards a defined contribution health plan model. This is a significant change in health insurance.
In the past, most Americans received health insurance through their employer. But, employer health insurance is broken. It costs too much, employees don’t get choice, and employees lose health insurance when they switch jobs. As a result, most employees pay too much for health insurance, have no idea what the plan actually covers, and don’t take the time to learn how health insurance works.
These new advantages (brought on and accelerated by health reform) empower employees and small businesses to take control over healthcare. This article takes a look at these new advantages of individual health insurance.
What is Individual Health Insurance?
Individual health insurance is a policy an employee purchases for themselves and their family through a licensed health insurance agent, who is appointed to represent the insurance carriers, or through the Health Insurance Marketplace in your state. It works just like car insurance.
As of October 1, 2013, employees can pick a plan that best fits their needs, including the doctor, keep the same plan for as long as they want, and save money via new premium subsidies. On top of this, small businesses can continue to cover employees' health insurance costs by offering a monthly healthcare allowance.
What are the New Advantages of Individual Health Insurance?
While individual health insurance plans are not new, there are new advantages that level the playing field with employer-sponsored health insurance. These new advantages include: coverage for a pre-existing condition and coverage of essential health benefits.
Compared to employer-sponsored insurance, individual health insurance has these additional advantages:
Employees keep their plan when they switch jobs
Employees choose the specific network (preferred doctors, clinics, etc.)
Employees choose the level of coverage they need, specific to their family's medical needs (deductible, co-pays, co-insurance, etc.)
Individual health insurance, on average, costs less
Here's a chart outlining the advantages of individual health insurance.