Ante Up More Money for Health Insurance

If you are preparing to purchase an individual health insurance plan of your own, get ready to pay more money.

According to the Henry J. Kaiser Family Foundation, Americans acquiring their own health insurance are looking at an average 20 percent jump in premiums, meaning some will end up with cheaper plans with fewer benefits.

The Kaiser report goes on to note that approximately 14 million Americans under age 65 acquire their coverage themselves as opposed to going through an employer. Some 77 percent of them got a premium increase, according to the survey.

According to a Kaiser official, what's driving up costs and how much is a fair rate jump are matters of debate among regulators and insurers. In the event a consumer is facing a 20 percent jump in price and inflation is negligible and your wages are not increasing, that on its face is an unreasonable addition.

The report goes on to note that approximately 60 percent of policyholders paid the larger bills, while 16 percent changed to a less costly insurance plan. For those who switched coverage, close to half indicated their new policy provided fewer benefits.

A spokesperson for America's Health Insurance Plans notes that health insurance premiums are increasing due to the fact that medical costs continue to go up and also because younger and healthier individuals are selecting to drop their coverage during a struggling economy.

Kaiser's study notes that the most common reason individuals select health insurance through the individual market is due to the fact they are self-employed or small business owners.

The average annual premium for individuals selecting a plan covering one person is $3,606 compared with $4,824 for group plans, where employers often contribute to the cost, according to Kaiser.

Policyholders who selected their own coverage spent on average $1,690 on health expenses in the last year along with their annual premium and typically had higher deductibles, according to the report. The average annual deductible for individuals who purchase their own policies is $2,498 compared with $634 for the most common form of employer-sponsored health insurance.

The new health law that was backed by a majority in Washington, D.C. this year establishes exchanges where individuals can shop for insurance, provides subsidies for lower-income consumers to acquire policies, and prohibits insurers from denying coverage to those with pre-existing conditions.

Most provisions, however, don't take effect until 2014.

If you're shopping on your own for an individual health insurance plan, be sure to do your homework and know what you're signing before you put your John Hancock on it.