PURCHASE IT YOURSELF

Apply for individual or family health insurance

If you’re self employed or work for a company or organization that doesn't offer health insurance – and you're not eligible for a group policy or a public plan such as Medicare or Medicaid – you'll probably have to purchase health insurance yourself.

Cost: It's usually among the most expensive health insurance options.

Pros:

  • If you shop around, you're more likely to get exactly the coverage you want.

Cons:

  • Unless you're young and in excellent health, individual and family policies tend to be far more expensive than a group policy, which shares the risk among a larger pool of subscribers.

How to get started:
First, gather all the basic information you'll need (full names of all family members, dates of birth, social security numbers). Next, make a list of what’s most important to you (prescriptions you or family members currently take, for example, along with treatments or procedures you anticipate you might need). Then decide which of the following approaches works best for you:

  • Call the health insurance companies you're interested in, ask about rates for the coverage you want, and – if you like what you hear – apply directly.
  • Call a broker. If you want to avoid the time and effort required to sort through the complex options, let a broker do the work for you. You can ask friends or colleagues to recommend someone, or search online. One good option is the National Association of Health Underwriters.
  • Use an online site (essentially an online broker), such as ehealth.com or ehealthinsurance.com, which many experts recommend.

Tip: Visit the newly updated U.S. government website healthcare.gov
to compare the policies and prices of nearly all the private health insurance policies and public health coverage programs available in the U.S.

Apply for individual or group coverage if you’re covered by HIPAA

Under the Health Insurance Portability and Accountability Act (HIPAA), if you or one of your dependents loses eligibility for group health coverage – including eligibility for COBRA continuation coverage – you can “special enroll” in another plan without waiting until the next open-enrollment period. For example, if you’ve lost coverage in your employer’s group health plan, you may be able to special enroll in your spouse's plan – or if one of your dependents has lost eligibility for group health coverage, he or she may be able to enroll in a different parent's health plan.

Cost: If you enroll in a group plan, your monthly premiums will usually be less than you’d pay for an individual or family policy – and about the same or less than you’d pay for COBRA continuation coverage.

Pros:  

  • As long as you’re eligible under HIPAA, preexisting conditions can’t be excluded.
  • If you enroll in a group plan, you can usually get better rates and coverage than you’d get on your own.

Cons:

  • You have a limited 30-day window to apply.

How to get started: 
To enroll in a group health plan under the so-called “special enrollment opportunity,” you or your dependent must request special enrollment from that plan within 30 days of the loss of other coverage. (For details about this and other alternatives to COBRA continuation coverage, see An Employee's Guide to Health Benefits Under COBRA.

Tip: If you miss the first 30-day window but enroll in a COBRA plan, you’ll get a second chance when your COBRA coverage expires.

Buy short-term health insurance

Short-term health insurance plans give you coverage for a limited period of time – usually one to 12 months. It’s often a good solution if you’re between jobs or waiting for another health insurance plan to start (between college graduation and starting a job, for example, or a few months before you’re eligible for Medicare).

Cost: You can usually expect to spend about half what you would for a long-term policy.

Pros:

  • The application process is usually simpler and faster than for a standard longer-term policy.
  • You can often reapply for another short-term policy plan if needed to extend your coverage.
  • Coverage often begins within 24 hours of applying.
  • You can usually apply for individual family members – just one child, for example, who might otherwise be excluded from another policy.

Cons:

  • Most policies don’t cover preventive care, physicals, immunizations, dental or vision care.
  • Most policies don’t cover pre-existing medical conditions, which are usually defined as conditions that have been diagnosed or treated within the previous 3 to 5 years.

How to get started: 
Call a health insurance broker, or search online using the search terms “short term health insurance” and your state.

Tip: Don’t buy a short-term medical insurance plan if you want to remain eligible for HIPAA plans (which are targeted to people with pre-existing medical conditions who’d otherwise have trouble getting health insurance); buying a short-term plan makes you ineligible for HIPAA plans.

Buy group insurance from a membership organization

If you belong to an organization that offers group health insurance to its members – such as AARP or your college alumni association – this is often a good option if you don't have employer-provided coverage and aren’t eligible for a publicly funded program.

Cost: Because group health insurance pools the risk among its many members, it's usually cheaper than buying an individual or family policy.

Pros:

  • Lower premiums
  • Often includes some organizational support, similar to what you'd get through an employer
  • Might not require a medical exam
  • Might not exclude pre-existing conditions

Cons:

  • Still expensive
  • May require a medical exam
  • May exclude pre-existing conditions

How to get started:
Make a list of the organizations you already belong to – unions, professional organizations, your college alumni association – and ask them if they offer group health insurance. Also try an online search, using the terms "membership organizations," "membership organization group health insurance benefits," or similar terms. Click on any results that you're interested in or think you might be eligible to join and then search deeper on the individual sites for membership benefits.

Tip: Be sure to compare both the rates of various group health plans and the cost of membership (there's often an annual fee).