A good percentage of Californians get their health insurance through companies, the government (State, Local, and Federal), Military, or State programs (Medi-Cal, Medicare, etc). That still leaves a large number of people that need to find and purchase California personal health insurance. Purchasing personal health insurance is usually both an expensive and confusing endeavor so let’s try to simplify it and offer guidance on how the find the most affordable personal health insurance in California. Before we jump into that process, let’s discuss who is in the market for personal health insurance and what their options are.
Who buys personal health insurance?
Basically, the purchaser of personal health coverage is anyone who doesn’t have coverage somewhere else. A fair number of these shoppers are self-employed or small business owners (think mom and pop type businesses). This includes 1099 contract workers who are essentially self-employed. You also have employees of companies that do not offer group health insurance. This dynamic might change a little with health reform but not much since the law doesn’t apply to small businesses in California (under 50 equivalent employees) and the majority of employees work for small companies. You also have dependents of employees who only get group health coverage for themselves (and not the dependents). Add in students, artists, kids, and that wraps up who generally finds themselves looking for personal California health insurance. So what does the market look like and what are the pro’s/con’s of personal health coverage?
The personal health insurance market pre and post health reform
The personal health market is very different from group in California in that it is currently medically underwritten. You can be declined due to health status/history until Jan 1st 2014. You can find more detail on the personal market at our Understand Individual health insurance page. Since personal health insurance is medically underwritten, the rates tend to be much less than group health for comparable coverage. The benefits also tend not to be as rich as company insurance since people are paying for their own coverage and that tends to push down benefits over time especially with the history of rate increases. Starting Jan 1st, personal health insurance will be guaranteed issue (regardless of health) like group health currently is. It will also be much more expensive than current available plans. You can check out the coming changes at our Understand California health reform page. One note…self employed people (including S-Corp officers/owners) may be able to deduct 100% of the their personal health insurance premium. This is a huge advantage that the non-self employed do not have.
Current plans on the personal health insurance market in California
We’ve written extensively about the best health plans available but here’s the important pieces. HMO’s have priced themselves out of the market. We’re really only insuring for a short period of time since all the current personal health plans on the market will go away Jan 1st (or on your anniversary month in 2014). It’s hard to justify going up the scale of benefits for personal coverage. The mid to low range plans generally make the most sense. Catastrophic or Major Medical personal plans are by far the most popular these days. You can run quotes and apply for California personal coverage online and instantly through our quote page. Rates are primarily driven by age and area although health status can affect the core rate available. Contracts are month to month and can be cancelled for any reason. Once approved, your individual rate cannot be increased due to your specific health situation going forward. There are no lifetime or annual caps. Maternity and preventative benefits are covered on all plans.
These are the highlights of California personal health insurance but we’re happy to help you with your particular situation.