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Most Americans get health insurance through their employer or Medicare. However, you can buy health insurance on your own. 

The Affordable Care Act (ACA) created exchanges that allow people to compare individual plans in their area. You can see each plan’s design and what you would pay in premiums and out-of-pocket costs. There are also individual insurance plans outside of the exchanges that offer even more choices. 

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Buying your own health insurance can seem daunting, but it can also open up more possibilities. Let’s take a look at how to get your own health insurance. 

What health plans can you buy on your own?

Individual health insurance and short-term health plans are both available to you. 

You can purchase an individual plan on the ACA exchanges or even outside of the exchanges. Insurers offer plans both on the exchanges and off the exchanges. 

The ACA exchanges provide subsidies for people with incomes under 400% of the federal poverty level. Those subsidies reduce premiums for individual plans on the exchanges. Those subsidies can save you thousands each year. However, subsidies aren’t available if you get a plan outside of the exchanges. 

Another option in most states is short-term health plans. Short-term plans offer low premiums, but fewer benefits than a regular health plan and potentially substantial out-of-pocket costs. You can have a short-term health plan for a year and renew twice, so you’re able to keep those plans for up to three years in most states. 

The downside of short-term plans is that you won’t find many benefits that are found in an individual plan. You will likely have trouble finding a short-term plan that covers mental health, prescription drugs and maternity care. 

Also, California, Hawaii, Massachusetts, New Jersey and New York don’t allow short-term plans and other states restrict the length of those plans. 

Where to shop for health insurance on your own

Your first step when you’re shopping for a plan on your own is to check the ACA exchanges. Most states go through the federal exchanges. A handful of states have their own exchanges and may have different rules and open enrollment than the rest of the country. 

Whether your state has its own exchanges or not, you can start at the federal site and choose your state. If your state isn’t part of the federal exchanges, you’ll be taken to your state site. 

Once in the right place, you’ll enter your information, including your income. With that data, the site will provide estimates of costs for each plan that includes subsidies. 

You can also search for individual insurance outside of the exchanges, though shopping for an individual plan outside of the exchanges is more difficult. You don’t have a federal or state government site to offer side-by-side comparisons. 

You’ll need to check out the health plans in your area individually. You also won’t benefit from subsidies, but you have more options outside of the exchanges. 

If you’re buying off the exchanges, you can start by checking out some of the largest health insurers in the U.S.: UnitedHealthcare, Anthem, Aetna, Cigna and Humana. Other options include regional health plans, such as Blues plans, as well as other insurers like Centene and Molina Healthcare. 

When choosing a health plan, check the company’s reputation and financial standing. You can do this through a Google search. See what customers say about them. Check their financial standing, such as the A.M. Best Financial Strength Ratings. Insure.com’s Best Health Insurance Companies is a great place to get that information. 

Pros and cons of buying health insurance on your own

There are positives and negatives to getting your own health insurance. Going through an employer usually means lower rates, especially if you don’t qualify for subsidies. However, that comes with fewer choices. 

Here’s a look at the pluses and minuses or shopping for health insurance on your own:

Pros

  • You have more health plan options. People who get a plan through an employer can only choose between the ones selected by the company. When you buy on your own, you’ll likely have multiple options (possibly dozens) in the ACA exchanges and individual market.

  • You may find a plan that better fits your needs. Employers have reduced options as they’ve looked for ways to cut health care costs. That could mean limiting employees only to a high-deductible health plan (HDHP) or a health maintenance organization (HMO). But what if you need more care, so you’ll pay more out of pocket in an HDHP? Or your favored providers and health care facilities aren’t part of an HMO network? In the individual marketplace, you can compare more plans to find one that works best for you.

  • People who qualify for subsidies can save. The ACA offers subsidies to reduce health care costs for people whose income falls below 400% of the federal poverty level. That’s about $50,000 for a single person and $69,000 for a couple. If you qualify for those subsidies, the exchanges automatically estimate the costs of premiums with the reduction.

  • You can buy a short-term health plan. Short-term health plans are low-cost plans that allow members to keep them for a year and chance to renew them twice. These plans can be an option for young, healthy people who don’t have regular prescription drugs or visit the doctor much. However, they aren’t technically health insurance since they don’t offer the comprehensive benefits found in a regular health plan.

Cons

  • More work for you. Searching for an individual plan takes research and narrowing down your choices. The ACA exchanges make it easier, but it’s still more time-consuming than an employer narrowing the selections for you.

  • Individual plans can be costly. People who don’t qualify for income-based subsidies can pay much more for an individual plan than someone with an employer-based plan. eHealth said the lowest premium plan in the exchanges (Bronze) costs an average $440 for single coverage monthly without subsidies. The average single Platinum plan, which has the highest premiums but lowest out-of-pocket costs in the ACA exchanges, costs $706 monthly without subsidies. Meanwhile, the average premiums for a single employer-based plan are $103 monthly. So, the cheapest ACA plan on average costs four times the average employer-based plan costs, if you don’t qualify for subsidies.

  • An employer doesn’t help you pay for health care. One reason why individual insurance is more expensive than employer-sponsored insurance is that businesses usually pay more than half of the health insurance costs. Kaiser Family Foundation said family coverage premiums costs are more than $20,000 on average annually in the employer-sponsored market. However, employers paid more than $14,500 of those premiums with employees picking up the rest.

  • Less likely to find a PPO. PPOs are the most common type of health plan offered in the employer-sponsored market. PPOs offer members to get care in-network and out-of-network and doesn’t require members to get referrals from primary care providers. Kaiser Family Foundation estimated that 44% of employer-based plans are PPOs. Those types of plans are not nearly as standard in the individual market. eHealth said that only 16% of individual plans are PPOs. Instead, more than half of individual plans are HMOs, which offer restricted provider networks and require members to get primary care provider referrals to see specialists. If you want a PPO, you may not be able to find one in the individual market. 

Buying health insurance on your own can be more complicated. However, by shopping around and comparing multiple individual health plans, you may be able to find a plan that fits your needs and doesn’t hurt your wallet.