You can purchase health care coverage in three ways:
Through an employer.
This is the least expensive way to acquire insurance. If you work for a large company, it may pay some or all of your monthly premium. Large businesses have the bargaining power to provide lower premiums and greater benefits. You probably will not be required to pass a health exam, and your preexisting conditions may be covered. You're also more likely to have a choice of plans if you work for a large employer.
Small businesses, on the other hand, are at a disadvantage in negotiating insurance coverage. They may have trouble even obtaining coverage based on the health history of one or more employees, and their premiums are likely to be more expensive. Some states have passed laws that require insurers to offer coverage to small groups within a set price range.
If you and your spouse are both covered by insurance at your jobs, the insurance firms may coordinate your benefits. That means that whatever is not covered by one plan (your primary carrier) could be paid by the other--provided you and your spouse are each covered under the other's policy. You may never receive more than 100% of the cost of the services provided. Not all insurers have the same rules, so check with your employee benefits counselor to see how benefits will be coordinated.
If you lose or leave your job, you have the option of extending your existing insurance coverage for up to 18 months under The Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA). The same law allows an employee's family to continue coverage for up to three years following death or divorce. COBRA permits you to continue your health care coverage at your former employer's group rate, plus a small (maximum of 2%) administrative fee. If you fail to pay the premiums, your coverage will be canceled and you will not be able to reestablish it.
COBRA coverage ends when you start a new job with health benefits. The option to extend coverage under COBRA is critical if you cannot afford the high premiums of an individual policy or if you have a preexisting condition.
As an individual.
If you are self-employed or unemployed, and are not covered by another family member's insurance, you should purchase an individual health insurance policy. The premiums for individuals can be expensive, even for the most basic plans. The best advice is to comparison shop and buy the best coverage you can afford. Group coverage may be available to members of certain trade or professional associations. A few states have 'risk pools,' which provide coverage to any person regardless of prior health problems. Check with your state insurance department if you are unable to obtain coverage on your own. Note that some preexisting conditions may not be covered under your individual health insurance plan. Be sure to determine with your insurance provider what is and is not covered.
Medicare and Medigap insurance.
Once you are 65, you can obtain Medicare insurance from the federal government's health insurance program. You also may qualify if you have certain disabilities. Medicare does not pay all of your expenses, and there are deductibles. Excluded are most nursing-home care or long-term care in the home. Medicare Part D provides coverage for prescription drugs. Many people over 65 buy a Medigap policy from a private insurer to supplement Medicare coverage.
There are 12 standard Medigap policies, labeled A through L, which make it easy to comparison shop. Depending on which package you choose, Medigap coverage may pay for such things as Medicare deductibles, coinsurance amounts or prescription drugs. Medigap insurers must accept you, regardless of preexisting conditions, if you apply within six months of becoming eligible for Medicare. If you wait longer, you may be refused coverage.
