Private Health Coverage

To get private coverage, somebody — you, your employer, your parents, your parents’ employer — must pay for that coverage. This section introduces the basic ways you can get private health coverage and points out some of the health expenses you may encounter.

Coverage Through Work

Many, but not all, jobs offer health benefits. That’s why private health insurance through work is the most common way that Americans get their health coverage.

If you get your health coverage through your job, usually your employer pays hundreds of dollars each month for it. Depending on your job, you may also have to pay some money each month to keep coverage. The total monthly expense paid for the private health coverage is called the premium.

In addition to the premium you and your employer pay, you have to pay various other expenses out of your own pocket. The most common expenses are called copayments. A copayment means that every time you have a doctor’s appointment, have a test done, or get a prescription filled, you have to pay some money. With private coverage, copayments generally range from about $10 to $50.

Depending on your health plan, you may not have to pay anything for certain services, such as routine testing and vaccinations, but have to pay a lot for other services. Some plans, for example, may require you to pay for half of all your hospitalization expenses, which can add up to hundreds or even thousands of dollars each day. Other plans simply don't cover certain medical expenses, such as wheelchairs or other durable medical equipment.

All plans have an annual limit on the total amount you have to pay in addition to your monthly premium. This limit is called the out-of-pocket maximum. So, if you have a plan with a $2,000 out-of-pocket maximum, once you’ve paid a total of $2,000 in copayments and other medical expenses, you won’t have to pay any copayments or other expenses for the rest of the year. Note: The monthly premium isn't included in this maximum and will still have to be paid.

Coverage Through Parents

Federal law says that parents who get health coverage through their jobs are allowed to add any children under the age of 26 to their plans. Usually, a parent adding a child to their employer-based coverage has to pay some or all of the child's monthly premium.

Essential Health Benefits

All private health coverage plans, no matter who pays for them, must cover the Essential Health Benefits (EHBs). This means that they offer comprehensive coverage, including regular checkups, vaccinations, chronic disease management, rehabilitative and habilitative services and devices, and mental health and substance abuse coverage, among other things.

Buying Individual Coverage

Some people pay a health coverage company directly instead of getting it through their jobs or parents. This is called individual coverage. As with employer-sponsored coverage, individual coverage requires you to pay a monthly premium, copayments, and perhaps a deductible, depending on your plan.

Healthcare.gov is the easiest place to sign up for individual coverage. It used to be that health insurance companies could deny you coverage or charge you more if you had a disability, but that's not true anymore. Now, anybody can get private insurance.

You should only think about getting an individual plan through Healthcare.gov if you cannot get health coverage from:

If you cannot get health coverage from any of the above options and your family’s income is between 138% and 400% of the Federal Poverty Guidelines (FPG), $48,560 for an individual ($100,400 for a family of four), the government may help you pay your monthly premium via a tax credit. If your family’s income is between 138% and 250% of FPG, $30,350 for an individual ($62,750 for a family of four), the government also helps you get a silver plan that has lower copayments and other expenses.

Health Coverage Income Limits for Your Family
Catastrophic plans
If you are under 30, you can sign up for a catastrophic plan with a high deductible. You have to pay the deductible before the plan pays for most Essential Health Benefits, but you can see your primary care provider up to three times and get preventive care without paying the deductible. If your income is below 400% of FPG, the government does not help you pay for a catastrophic plan, so it could be more expensive for you than a bronze or silver plan on Healthcare.gov.

Read more about how to sign up for individual coverage in DB101's How Health Benefits Work article.