How to Find Low-Cost Individual Health Insurance


WRITTEN BY: Craig Sturgill

UPDATED: SEPTEMBER 27, 2022 | 1 MIN READ

Finding low-cost individual health insurance can be costly if you don’t know where to look. The main issue many people run into is finding a balance between the price and quality of the plan.

You do not want to sacrifice quality for price or vice versa. If you need direction on where to look for quality health insurance at a great price, look no further.

What is Individual Health Insurance?

Many times, employees rely on employer-provided health insurance. But what if you need your individual health insurance? You can undoubtedly find an insurance company with a health plan for you or your family.

Individual health policies are also known as “personal health plans.” Individuals can buy health plans from the government or private insurers. And, the Affordable Care Act (ACA) ensures companies can’t deny you health insurance coverage for pre-existing conditions or disabilities.

Advantages of Individual Health Insurance

Here are the advantages of an individual health plan:

  • You have more control. You can make personalized choices about the insurance provider, plan, and options. Plus, you can focus on a company that includes your trusted doctors in their network. You can also easily change plans or make changes to yours during the Open Enrollment Period (OE).
  • You have increased employment freedom. Since your health insurance wouldn’t be tied to your employer, you have more freedom to change jobs. Or you can just self-employment and forgo having an employer altogether.
  • You may be qualified for help from the government. Some self-insured individuals are qualified to receive subsidies from the federal government. These subsidies help you pay for your insurance.

Disadvantages of Individual Health Insurance

Here are the disadvantages of individual health insurance:

  • You have to pay for it all. Employers typically pay a large percentage of your healthcare costs with employer-provided plans. While you can find affordable individual health insurance, you still have to cover all the costs. Only 61% of Americans reported being satisfied with their healthcare expenses in 2019. 
  • Often, you pay more for less. Individual health insurance can be more expensive than employer-based plans and offer fewer services. Individual health insurance plans often have higher deductibles and premiums than employer-based plans. This means that you’ll pay more out-of-pocket before your coverage kicks in and will likely pay more each month for your premiums.

How to Choose the Most Affordable Health Insurance Plan

Finding the most affordable health insurance plan isn’t easy, but it’s doable. Here’s our top advice: 

  1. The first step is figuring out what kind of coverage you need. Do you have any existing medical conditions? Do you have children or other family members who need coverage? Are there any prescription medications that are essential to your health? Do you need coverage for birth control? Each of these will affect the cost of your plan.
  2. Focus on the right plan before you focus on the right provider. Finding the right plan for you is more important than finding the right provider. Learn what types of plans and which can best meet your healthcare needs. For example, Bronze plans are great for healthy people and those who only need preventative care.
  3. Shop around for plans with different providers. You’ll find that some companies charge more than others, so comparing prices from different providers never hurts before deciding which plan is right for you. It’s also a good idea to compare plans from the health insurance marketplace at healthcare.gov to plans from private insurers to make sure you get the coverage you need with an affordable monthly premium.
  4. Think about premiums and their impacts. The lower the premium, the less expensive your monthly payments will be. However, there are other factors to consider when determining whether or not a certain plan is worth its price tag — including what types of coverage are included and how much you’ll pay out-of-pocket if something goes wrong. You should also consider whether you’re able to see your current health care providers with the plan you choose.
  5. If your family is low-income, consider Medicaid. This is the best cost-effective solution for low-income families. The government provides it at lower rates. Most states at least provide a children’s health insurance program, often called CHIP.

Look at the premiums for low-cost individual health insurance

If you’re trying to find low-cost individual health insurance, you want to look at premiums. This is the amount you pay for your health insurance each month, and it’s often the first thing people think of when they want to know how much they’ll be paying. 

Review deductibles and out-of-pocket expenses

Other factors affect the price of your health insurance besides just premiums. For example, you also need to consider how much each plan costs in deductibles and out-of-pocket expenses. You would have to pay these amounts before your insurance starts covering anything (like co-pays for doctor visits or co-insurance). 

Keep in mind, some healthcare plans have coverage options that allow for essential health benefits to be covered upfront so you don’t have to pay a co-pay or high out-of-pocket costs for things like annual physical exams, screenings, and checkups.

Review the maximum out-of-pocket expense

The maximum out-of-pocket expense is the highest amount you are responsible for paying for your medical care. This includes deductibles, co-insurance, and co-pays. It can be frustrating to pay so much before your insurance kicks in. Know your options to make an informed decision about your health insurance plan.

Compare annual expenses with the level of care you need

 If you’re looking for low-cost individual health insurance, you must consider the level of care you’ll need. Using your health and medical history as a guide, you can choose a plan that covers your needed services.

If you’re healthy and don’t have any significant health concerns, then a high-deductible plan with lower premiums may be right for you. These plans generally have lower monthly payments but require you to pay more out of pocket when services are needed.

However, if you are older or have a chronic illness such as diabetes or asthma, getting a more comprehensive plan with lower out-of-pocket expenses is best.

Low-Cost Individual Health Insurance vs. Employer-Sponsored Plans

 If you’re looking for low-cost individual health insurance, you’re probably wondering how it compares to employer-sponsored plans. Employer-sponsored plans are the most common type of health care coverage in the United States.

They allow employees to purchase their health insurance at a lower rate than they would if they were on their own, and employers often cover part or all of the cost of the employee’s plan.

Does individual health insurance or employer health insurance cost more?

How individual health insurance rates compare to employer-sponsored plans truly depends on the individual provider versus the employer. Every employer is different, and while one may be less expensive than individual health insurance, others may be even more expensive and offer fewer benefits.

What are the disadvantages of employer health insurance?

The disadvantage of employer-provided health insurance is that you have less freedom in picking the right plan for you and your employment.

You might have to stay with your employer longer than you want just because you need health insurance. Plus, it may be challenging in the period between switching employers. 

Also, when you have employer-sponsored health insurance coverage, you don’t typically get to choose the type of plan. If your employer offers an HMO plan, you have an HMO plan. When you purchase individual health insurance or family plans, you can choose whether you want an HMO, PPO, POS, or EOS plan.

Should you purchase individual health insurance?

There’s no correct answer that applies to every single person. If your employer offers excellent healthcare benefits and plans to stay with that employer, don’t buy individual health insurance.

But if you want more flexibility, control, and the ability to have health insurance without an employer, then you should purchase health insurance. 

FAQs

What’s one of the biggest disadvantages of employer-sponsored insurance?

One of employer-sponsored insurance’s biggest disadvantages is that you might sometimes lose money. For example, if you put too much in your flexible spending account (FSA), this money will often disappear. Plus, the money in an FSA belongs to your employer, so you might lose it entirely if you quit. 

Why would an employee refuse an employer-provided health plan?

Here are some reasons an employee would refuse an employer-provided health plan:

  • Employees are covered by their spouse’s or another family member’s plan.
  • They’re already receiving insurance through another employer.
  • The employee is already on an individual health plan. It’s possible their plan has better benefits or is more affordable.

Can I have Obamacare and employer insurance?

It depends on your employer’s insurance, but probably not. If your employer’s insurance is considered comprehensive and cost-effective, you are most likely not eligible to receive government assistance like Obamacare.

Is it better to get health insurance from work?

It depends on what you’re looking for out of a health plan. Typically, employer-provided health plans will provide excellent, cost-effective coverage. However, you have less control over your health plan than you would with an individual insurance plan.

Can I buy health insurance on my own?

Yes. You can buy health insurance on your own. You can buy an ACA plan provided through a government exchange or marketplace or a plan from a private insurer.

How to Get Help Finding Low-Cost Individual Health Insurance

Finding the best individual health insurance for you and your family can save you thousands of dollars a year. For many people, it’s an absolute necessity.

As a consumer, finding the right coverage at the right price is up to you. But we can help at Agile Rates by helping you compare all your options.