Individual Health Insurance
Health insurance coverage purchased by an individual or family directly from an insurance company or through a marketplace, rather than obtained through an employer or group plan. This coverage is typically more expensive than group insurance but provides flexibility to choose specific benefits and providers.
Example
“After leaving her corporate job to start a consulting business, Jennifer purchased individual health insurance through the state marketplace to maintain coverage for her family.”
Memory Tip
Individual health insurance = 'I Choose My Own' coverage instead of taking what an employer offers.
Why It Matters
Individual health insurance provides essential coverage for self-employed individuals, early retirees, and those whose employers don't offer benefits. Understanding options and subsidies available through marketplaces can make coverage affordable and prevent financial catastrophe from medical expenses.
Common Misconception
Many people assume individual health insurance is always prohibitively expensive compared to employer plans. While often more costly, premium tax credits based on income can significantly reduce costs for eligible individuals, sometimes making marketplace plans more affordable than COBRA or employer coverage.
In Practice
Sarah, a freelance graphic designer earning $45,000 annually, shops for individual health insurance on her state marketplace. She finds a Silver plan costing $420 monthly, but qualifies for a $280 monthly premium tax credit based on her income. Her actual monthly cost is $140, plus she receives cost-sharing reductions that lower her $3,500 deductible to $1,400, making the coverage quite affordable despite being individually purchased.
Etymology
From Latin 'individuus' meaning indivisible or single person, combined with 'health' from Old English meaning wholeness, and 'insurance' from Latin meaning security or guarantee.
Common Misspellings
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Related Terms
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See Also
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