Buying Individual Health Insurance

Suzanne Hoholik
THE COLUMBUS DISPATCH

Most people never think about shopping for health insurance. It’s one of those benefits that come with your job. The details — co-pays, deductibles and premiums — are left to employers.

But as health-care costs grow more burdensome for employers, buying individual policies could become more commonplace.

Four years ago, Bob Judson and his employer, Lifestyle Communities Pavilion, realized that adding him to the company’s policy would increase premiums.

He is 59; the average employee there is 25, and only two are older than 30. Younger people are cheaper to insure.

Judson, the part-time chief financial officer for the Arena District concert venue, "saw all the bills come across my desk," he said. "But I didn’t want to be without insurance."

So both sides agreed Judson would find his own.

"They give me money to buy insurance; they write a check to the insurance company each month," Judson said.

He went to Larry Link, of InsuranceLink Agency in Worthington, who worked up several quotes. Judson bought a catastrophic-coverage policy from Anthem Blue Cross and Blue Shield.

Monthly premiums are about $300 with a $5,000 deductible. Judson and his wife pay out-of-pocket for doctor’s visits and get a break on prescription drugs.

It worked for Judson, but with increasing corporate layoffs, early buyouts and workers going out on their own, many don’t know where to look for health insurance.

Ann Womer Benjamin, director of the Ohio Department of Insurance, said people can call her office to find licensed health-insurance agents.

"The big problem with individual coverage (is that) typically it’s more expensive than group coverage, and it is medically underwritten, where group coverage is not," she said.

"If a person has a pre-existing health condition, that will be taken into consideration by health insurers. That may mean higher rates, or coverage will be denied."

Individuals also can shop online for policies. Some Web sites compare health-insurance companies that offer premiums varying from $80 a month to $1,100 a month.

"Most people want a $500 deductible with an office visit co-pay and drug card," said Link, the insurance agent. "My guess is they think it’s about $200 a month for a husband, wife and two kids."

It’s closer to $600.

Link creates a list of plans with costs from several companies to give his clients options. The plans can include a healthsavings account and a catastrophic-coverage, high-deductible policy.

Individuals fill out applications that are sent to insurance companies; a decision usually takes a couple of weeks.

"The key to individual insurance is if you’re healthy," Link said.

He said he sells to young professionals with six-figure incomes who work for themselves, widows who don’t qualify for Medicare and parents buying policies for their children who have graduated.

Companies understand wading through policies can be confusing and rely on agents and brokers to explain the details to consumers, said Hugh Hammond, Anthem’s senior vice president for individual sales.

"There are a lot of people who need to be helped through the process to understand co-pays, out-of-pocket costs," he said.

"We’re trying to make products easy to understand."

Insurance premiums rose 9 percent last year, says the Kaiser Family Foundation, a nonprofit research group.

As premiums continue to rise, more employees will buy individual policies, Link said.

" ‘These health-insurance rates are getting high,’ some people in a group will say; ‘I’m going to pick up the phone and buy my own insurance,’ " he said.

"Or, employers who can’t pay it anymore give employees a $200-a-month raise and let them go buy their own insurance."