Individual Health Insurance is any individual health care plan that is purchased from health insurance providers by a sole client. This client, by purchasing an individual health insurance plan, does so at the risk of higher costs and higher deductibles. Approximately nine percent of United States citizens have purchased individual health insurance plans.
Individual health insurance plans place the full cost of coverage and benefits on the purchaser. These costs are affected by the age of the purchaser and any pre-existing medical conditions. Pre-existing medical conditions are defined as any medical ailment or disability that presents at least six months prior to receiving coverage. Costs are also affected by the level of coverage chosen and what benefits a customer wants from the health insurance provider.
Some states allow the health insurance providers to underwrite their individual health care plans and this can also affect individual health insurance premiums. If the purchaser is self-employed, he or she can receive tax deductions based on their level of health insurance coverage in addition to other tax reductions. However, the majority of individual health insurance plans that are purchased are done so because employers may not offer a health benefits package.
In addition to higher cost, there are other risks associated with purchasing an individual health insurance plan. One major risk is that the person attempting to purchase insurance may be considered uninsurable by the health care provider when simply seeking out an individual health insurance plan. Another risk is having a pre-existing condition. The degree, or severity, of the condition may also deem a person uninsurable because of costs to be attributed to the health insurance provider from hospital care and medical treatments.
Another risk to people with individual health insurance plans is losing that coverage. This may be due to changes in the economy, the state of the person's health, or policy changes issued by the health care provider. The primary benefit associated with purchasing an individual health care plan is better coverage. Individual coverage, when juxtaposed with group coverage, provides the insured person with a better standard of care and is less likely to be dropped by the insured. The higher premiums provide these benefits.
Regulation for health care providers and individual health care plans is administered by the state in which the individual resides. These regulations have been standardized by the National Association of Insurance Commissioners (NAIC). Health insurance providers also receive less stringent federal regulations due to the McCarran-Ferguson Act of 1945. This act also limits the affect of antitrust laws on insurance companies.
Examples of two regulations administered by the NAIC are the Unfair Trade Practices Act and the Accident and Sickness Insurance Minimum Standards Model Act. States may choose to enact or decline these regulations as they see fit.