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A Step-By-Step Guide to Buying Individual Health Insurance

Last updated March 17th, 2020

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Shopping for health insurance can be daunting, especially when you’re buying individual health insurance on your own. To simplify the process, we created a step-by-step guide to arm consumers with the information they need to make smart decisions about healthcare coverage.

The blueprint below provides a thorough explanation of where, when, and how you can go about buying individual health insurance, and also includes information to help you decide whether to buy a Marketplace or non-Marketplace plan.

What Do You Need Before Buying Individual Health Insurance?

Before you enroll you’ll want to gather the following information about yourself:

  • Birthdate;
  • Home address;
  • Social Security number;
  • Household income for this year (a best estimate);
  • Information on how you file your taxes;
  • Income and employer information; and
  • Documentation (if you are a legal immigrant)

Assess Your Needs

Before settling on a plan, you’ll want to consider your healthcare needs. How much coverage do you need? How often do you get sick? Is there a particular doctor you’d like to continue seeing? If you love your internist or OB/GYN, make sure they are in the provider network for the plan you’re considering. You can also ask your doctor if he or she accepts a particular health insurance plan.

Depending on your healthcare needs, you may want to consider a plan that includes a large network of doctors – you’ll have more choices this way. Choosing a plan with a larger network is especially critical if you live in a rural community, as you’ll be more likely to find a local doctor who takes your plan.

Important Details to Consider:

  • Check to see which plans will allow you to see your current doctor(s) or provider(s);
  • Double-check whether a particular plan will cover your current prescriptions;
  • Make sure your ongoing medical needs will be covered.

Check if You Qualify for a Subsidy

If you make less than $49,000 per year and don’t have health insurance through your employer, you may qualify for a subsidy. You can use this tool to find out if you qualify.

Where to Shop When You’re Buying Individual Health Insurance

Healthcare websites can help you compare different types of plans from multiple health insurance companies before you buy. Once you’re buying health insurance on your own, use our plan comparison tool to help you figure out what health insurance option works best for you.

When to Purchase Individual Health Insurance

Knowing when you can start the process of buying individual health insurance is vital, as coverage cannot be purchased year-round.

Annual Open Enrollment Period

Barring several exceptions, consumers must buy health insurance plans during a specific time period during the year, which is known as “Open Enrollment Period” (OEP). In 2019, the Open Enrollment Period ran from November 1, 2018 to December 15, 2018.

However, if you live in certain states, then good news – you’ll experience less of a time-crunch when buying individual health insurance, as Open Enrollment Period is extended for you (read more about extended Open Enrollment Periods here).

Special Enrollment Period

While most people select coverage during open enrollment, it’s possible to buy coverage outside of the open enrollment window in certain situations. Consumers can qualify for a Special Enrollment Period if they recently got married, divorced, or if their citizenship status has changed; these events and more are referred to as  “qualifying life events”.

Consumers should note that the Department of Health and Human Services has proposed new policy changes that will impose more stringent documentation requirements on people trying to sign up for Marketplace coverage through special enrollment periods (SEP), which are available to people who experience qualifying life events like losing employer-sponsored coverage or getting married in the interlude between annual open enrollment periods. In other words, you may have to produce a marriage certificate or other documentation which verifies your qualification for a SEP.

If You Qualify for Medicaid: Enroll Whenever

Medicaid is another exception; people who qualify for Medicaid can enroll at any time.

If You’re Native American: Enroll Whenever

Native Americans are also permitted to buy healthcare coverage at any time.

Buying Short-Term Health Insurance When You’ve Missed Open Enrollment

If the Open Enrollment Period has passed and you are not eligible to buy coverage during a Special Enrollment Period, short-term health insurance plans can be found side-by-side with ACA plans on private websites like HealthCare.com. These plans have lower costs and more flexible terms than ACA plans, and they typically allow you to visit any doctor. However, they don’t cover pre-existing conditions and are not equivalent to full ACA coverage.

Difference Between Marketplace and Off-Marketplace Plans

The biggest difference between subsidy-eligible “Marketplace” plans and harder to find non-Marketplace plans is the cost. If you qualify for cost assistance, then buying individual health insurance through the ACA Marketplace is usually the best choice. If you are eligible to receive even a small subsidy, it makes financial sense to buy a Marketplace-type plan.

Individual plans sold through the ACA Marketplace almost always are less expensive than non-Marketplace plans. For qualifying individuals, Marketplace plans may also be subsidized in the form of tax credits, subsidies, Medicaid, or the Children’s Health Insurance Program (CHIP). Depending on your annual household income, it may or may not make sense to consider non-Marketplace plans. Either way, it’s wise to shop around to find a plan with the best terms and conditions.

Additionally, some professional memberships, including the American Bar Association and Freelancer’s Union offer a limited number of health insurance plans. Healthcare startups such as Oscar and Bright Health are another option for consumers who are interested in buying individual health insurance.

Short-term plans should be part of your decisionmaking as well. In most states, short-term plans last for 364 days. These inexpensive plans are not the same thing as ACA coverage. They don’t cover pre-existing conditions but generally meet your basic medical needs.

Whatever plan you choose, know that there is no such thing as the “best” insurance plan – it all depends on your financial situation and healthcare needs. If you decide to consider non-Marketplace plans, a wider array of plans will be available to you; however, if you shop for individual health insurance outside the Marketplace you may need to reach out to multiple sources in order to be aware of all the options available to you.

Individual health insurance policies are available nationwide, and these plans may be a good choice for some consumers. In many states, insurance carriers which don’t offer plans on the exchange do offer plans off-exchange. Depending on where you live, buying individual health insurance outside of the government Marketplace may be advantageous, as you’ll have access to more plan options this way.

Know the Differences Between Major Medical Networks (HMO, PPO, EPO, and POS)

Buying individual health insurance is all about determining which type of insurance plan — HMO, PPO, EPO, or POS — is best for you. The type of insurance plan you select determines how many providers will be covered under your plan and whether you’ll need a referral from your Primary Care Doctor (PCP) before seeing a specialist (eg. dermatologist, cardiologist, radiologist). All of the following major medical plans meet the minimum essential coverage requirement under the Affordable Care Act, and therefore grant you access to all the essential health benefits (EHBs).

Alternative Options: Understanding Other Plan Types

High-Deductible Health Plans (HDHP)

Consumers covered by high-deductible health plans (HDHPs) pay a smaller premium amount each month, but they must also pay thousands of dollars out-of-pocket before insurance begins to cover the cost of their medical expenses. While high-deductible health plans cost less than traditional insurance coverage on a monthly basis, HDHP coverage can take a toll on your wallet if you do get sick and need to use your health insurance. HDHPs do provide minimum essential coverage, giving you access to all the essential health benefits.

HDHPs can be used in conjunction with a health savings account (HSA). An HSA is a type of savings account that lets you set aside pre-tax dollars to use toward qualified health expenditures. Typically, HSA holders are issued a debit card that can be used to pay for things like dental exams, new glasses, doctors’ office visits, and so on. While all purchases made through an HSA are tax-free, there is a limit to the amount of money you can contribute to an HSA in a given year. Also, funds in an HSA rollover from one year to the next if you leave them unused.

Catastrophic Health Insurance

Catastrophic health insurance is a special type of high-deductible health plan aimed specifically at protecting you from catastrophic health events (that is: situations that may cost a person may thousands of dollars). If you’re on this plan, you must meet the very high deductible before insurance actually kicks in; for 2017, the deductible for an individual catastrophic plan is $7,900. Catastrophic plans are limited to only people under the age of 30 or for anyone who has a hardship exemption or affordability exemption.

Catastrophic coverage can be a practical option for healthy 20-somethings that don’t plan to use their health insurance for more than preventive care. However, catastrophic plans are not eligible for a tax subsidy, so it’s smart to get plan quotes for both catastrophic plans and other plans to see if your income level qualifies you for less expensive insurance than what a catastrophic plan may offer. Catastrophic health insurance provides minimum essential coverage, giving you access to all the essential health benefits.

Compare Costs Before Buying Individual Health Insurance

The ACA has neatly categorized all individual health insurance plans into four metal tiers: bronze, silver, gold, and platinum. Every plan across all tiers covers all the essential health benefits; what differs is the cost-sharing between you and the insurance company. How much can you afford to spend?

Metal Tiers

When shopping around for health insurance quotes, you’ll find that certain plans are sorted by varying metals (bronze, silver, gold, and platinum). The metal tiers will help guide you in understanding the split share between you and your insurer (how much the insurer will cover for your medical expenses versus how much you will cover out-of-pocket).


Bronze plans are the most inexpensive, but typically carry the highest out-of-pocket expenses. That means after the cost of your monthly premium, deductible, coinsurance and copayments, a Bronze plan pays 60% of your healthcare bills, and you are responsible for 40 percent of the costs.


Silver plans pay an average of 70 percent of your healthcare costs, which include monthly premium, deductible, coinsurance and copayments, and you are responsible for 30% of the costs.


Gold plans pay an average of 80 percent of all healthcare costs, including the monthly deductible, and you are responsible for an average of 20% of the costs.


The most versatile metal plan, Platinum plans pay an average of 90 percent of healthcare costs, leaving the policyholder with just 10% of the bill, on average.

When you’re comparing costs among different plans, don’t focus solely on a plan’s premium and deductible costs. If you have one or more medical condition that require ongoing care, buying individual health insurance with a lower deductible and lower copayments is a good idea; you’ll pay a higher premium, but your overall out-of-pocket costs may be lower. If in the coming year you anticipate using your coverage only sporadically, look for a plan with a cheaper monthly premium.

Financial Guidelines to Keep in Mind

A plan that has a higher premium and lower out-of-pocket costs may be a good choice if:

  • You go to the doctor frequently;
  • You take brand-name prescription medications on a regular basis (Note: check that your drugs are covered under the health plan’s formulary, or you may face very steep costs);
  • You are pregnant or have small children;
  • You will undergo a surgery in the coming year; or
  • You require treatment for a chronic condition such as diabetes, asthma, clinical depression, or cancer.

A plan with higher out-of-pocket costs and a lower monthly premium may be a better choice if:

  • You can’t afford the higher monthly premiums for a plan with lower out-of-pocket costs; or
  • You are in good health, you are male and/or rarely see a doctor.

Read the Fine Print, Review Coverage Details

Once you’ve narrowed down your options, make sure your chosen plan covers all of your needs. Re-read your plan’s Summary Of Benefits and check the list of services that are covered. Some plans may include better coverage for services like physical therapy, oral surgery, or mental health care, while others might charge lower copays for prescription drugs or ER visits. If you cannot find reliable information about a particular plan on the web, call the customer service line of the insurers you’re considering. Buying individual health insurance is easier if you know which questions to ask.

You may want to ask and/or consider:

  • Is a particular medication covered under the plan?
  • Which birth control options are covered under this plan?
  • What happens if I get sick when traveling outside the United States?
  • If you want to avoid the referral process, rule out plans which require a referral every time you want to see a specialist.
  • How do I begin the process of signing up, when does my coverage start to kick in, and what documents will I need?
  • Some insurers have really awesome websites and mobile apps for self-service, so if you hate talking to people on the phone, only choose companies which have an active web presence.

Buying Individual Health Insurance: A Checklist

  1. Buying individual health insurance does not have to be complicated – you can begin the process of enrollment by going online or contacting an agent or broker. The choice to purchase a plan on the Marketplace mostly depends upon whether you qualify for cost assistance. Various online tools, such as HealthCare.com’s plan comparison tool, can help you view your plan options side by side.
  2. Consider your healthcare needs and any budgetary constraints. Check ACA income requirements to see if you qualify for cost assistance, and consider short-term plans if you don’t qualify.
  3. When you’re buying individual health insurance, eliminate options which exclude your doctor or any local doctors in the plan’s provider network.
  4. Determine whether you want to pay a higher monthly premium to enjoy more substantial coverage, or if you’d prefer to buy a plan with a lower premium cost and higher-out-of-pocket costs.
  5. Once you have selected a plan, apply for coverage and complete any necessary enrollment steps. Know when your insurance coverage begins – take note of the date when your coverage will kick in.

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