Nearly 18 million Americans are covered through individual health insurance policies that are purchased in the open market – meaning that they are not provided by a group or employer-based plan.

People generally choose this option because they are self-employed, have used up COBRA coverage, retired early, or do not have a spouse with group coverage.

Until changes occur in the U.S. health care system, the reality of these plans is that:

• They are usually more expensive than group plans
• They often offer less coverage
• They often place limits on pre-existing conditions such as cancer.

Nevertheless, it is possible to find an individual health insurance policy that provides the coverage you need.

Compare plans

Most people should purchase the best coverage they can afford to protect themselves against future financial difficulties (or disasters) due to unanticipated medical bills.

Generally, the higher the monthly premium, the lower your out-of-pocket costs will be for deductibles, co-payments, and coinsurance. 

When shopping for a plan, compare each based on the following:

• What medical services are covered? Some plans may cover imaging tests while others won’t.
• How much will you have to pay out-of-pocket before your coverage begins? Some plans require you to pay a deductible.
• How much will you have to pay out-of-pocket due to co-payments and co-insurance?
• Does the policy have an out-of-pocket maximum? This includes deductibles, co-payments, and co-insurance.
• Will the plan cover a pre-existing condition such as cancer?
• Are the doctors you want to see in the plan’s network?
• Does the policy offer coverage that can’t be canceled and that has guaranteed renewable coverage?  Under this type of policy, as long as you pay the premiums (and do not lie about your condition to the insurance company), they cannot cancel your policy.
• If you can’t find the type of renewable policy above, the next best alternative is a “conditionally renewable” policy. With this type, the insurance company cannot single you out for cancellation but must cancel all policies like yours in order to cancel yours. (Is this cheaper or more expensive than others? What are limitations?)

Avoid gap in coverage

If you have cancer or another pre-existing condition, do not let your existing insurance (i.e., COBRA) lapse. The Health Insurance Portability and Accountability Act (HIPAA) prohibits insurance companies from refusing to cover a pre-existing condition if you:

• Had at least 18 months of prior coverage through a job;
• Used up any COBRA or state continuation coverage rights; and
• Had no gaps in coverage longer than 63 days.

If you meet these conditions, you may be able to buy individual health insurance that will cover your cancer care costs immediately.

Before you shop

Before deciding on a plan, considering doing the following:

• Visit unbiased resources, such as Cover the Uninsured, a project of the Robert Wood Johnson Foundation.  Here you can search individual health plans by state.
• Find an independent insurance agent. They can help you find plans that meet your needs.
• Go directly to major insurers such as Aetna, Blue Cross Blue Shield, Cigna, Humana, or UnitedHealthcare to learn about and/or buy an individual policy.
• Consider finding a group plan through fraternal organizations, alumni associations, trade associations, or the AARP.

State health insurance risk pools

Thirty-four states offer medical insurance for people with pre-existing conditions who have been denied coverage or can’t find an individual policy they can afford.

The American Cancer Society provides a list of states that currently offer risk pools as well as the contact information for each state. 

All pools require you to pay premiums, but the cost is often small. To be eligible for a state risk pool, you must be a resident of the state, have been rejected for similar health insurance at least once, and the premium must be higher than that offered by your state plan.
 

Limited benefit plans - of limited benefit

Limited benefit plans such as mini-medical or “mini-med” plans are often offered by private insurance companies at a low monthly cost to people who have been denied coverage elsewhere. However, these plans place a limit on benefits and will not cover the bulk of a hospital stay or surgery.

It is also a good idea to be wary of discount medical cards, which are sold by private companies. Theoretically, you pay a monthly fee to access lower negotiated prices for medical services. However, Georgetown University’s Health Policy Institute found that many card holders have difficulty finding doctors and hospitals that accept the cards.