Private Medical Insurance: How to Save Money on Necessary Coverage

For many self-employed individuals and their families, the only available option for health care coverage is private medical insurance. These plans are typically more expensive than comparable group or employer-sponsored plans, and may offer fewer benefits as well. Private health insurance plans usually require the applicant to undergo a physical examination and, in most cases, necessitate the completion of a lengthy and intrusive personal questionnaire. Overweight individuals, smokers and those with pre-existing conditions will likely be quoted higher rates if they can obtain coverage at all; since private health care policies must be underwritten, high-risk individuals may have difficulty in finding a company to provide insurance for their medical needs.

Private medical insurance typically covers preventive health services like doctor’s examinations, laboratory work, and immunizations. In contrast to employer-sponsored plans or group health insurance policies, private plans usually feature higher deductibles and lower benefit levels. Because most of these policies feature bare-bones coverage, any additional coverage like vision, dental, or maternity care must be paid for separately, usually as a rider to the regular policy. Since some plans do not allow additional coverage to be added at a later date, it’s best to arrange for these coverages at the time the policy is written; this will ensure that the coverage is in place when and if it is needed.

For those who are seeking insurance due to the loss of a job, COBRA coverage may provide a useful alternative to the high expense of purchasing private medical insurance. The group rates available through COBRA are usually less expensive than the comparable individual policies; however, COBRA coverage lasts only eighteen months. When this coverage expires, most individuals will find themselves in the market for health insurance once more. By accepting a higher deductible and eliminating extra coverage that is not strictly necessary, like dental and vision benefits, consumers can often obtain health insurance at an affordable rate. Given the high cost of individual health insurance, choosing a higher deductible can often save money dollar-for-dollar over a comparable low-deductible comprehensive health care policy; this allows consumers to obtain the care they need while keeping their costs to a level they can afford.