However, if thinking about venturing out alone, there are a number of things a person should consider first. In addition to the worries about business income and sudden changes in contracts or customers, one must also consider their health insurance. Without sufficient health insurance, a self-employed individual could find themselves sick, unable to work and facing continuously mounting medical bills.

Health insurance 101
Health insurance can be purchased or funded by the State; with most industrialized countries having some form of universal health care system. In fact, the United States is the only industrialized country that is without one. Without health insurance, an individual is much more likely to face significant financial hardship. In the U.S., for example, approximately half of all bankruptcies in the U.S. caused by the burden of unpaid health bills.

When an individual is self-employed, they are further at risk, without the opportunity of employer-subsidized health insurance. A lack of health insurance not only places a person at higher risk of financial hardship; it also puts them at a greater risk of illness and even death. In fact, in a study published in the American Journal of Public Health in 2009, American’s lacking health insurance were a whopping 40 percent more likely to die than those with health insurance, even controlling for “race/ethnicity, income, education, self- and physician-rated health status, body mass index, leisure exercise, smoking, and regular alcohol use.”

Getting insurance when self-employed
It is best for individuals to start looking at health insurance before starting their own business, taking time to get educated about their options. First, it is important that they look into government options and programs. In some countries, such as the U.S., employers are bound to continue to offer health insurance for a period of time after a person leaves their place of employment. Most of this information can usually be obtained by visiting the local government’s offices or website. If self-employment is being sought in a trade or specialized area, there may be a union or professional organization that could be joined that offers health insurance to members. Again, this information can usually be obtained by contacting the local government authority. There may be tax breaks or grants that can be utilized to help out, allowing the self employed to deduct money spent on health insurance from their taxes or to apply to government programs for aid.

Shop around
The best businesses are well planned and well researched. This planning should extend to all areas of a business, including the health of its most important asset – it’s employee(s). Forbes Magazine suggests the best approach for those who are self-employed is to purchase a policy with lower premiums but high deductibles. Rates vary significantly by provider and by health status of the individual seeking the insurance, so it is important to get many different quotes from different companies.

Group plans are available from many health insurance companies, allowing the option to add a small number of employees to the plan as the business grows. Group plans are an attractive option in places where legislation exists requiring health plans offer group health insurance options. For those that are hard to insure, this is especially helpful as it can make it easier to obtain health insurance at a reasonable rate.

References
Forbes: The Best Ways To Find Health Insurance if You Are Self-Employed In 2012

http://www.forbes.com/sites/kerryhannon/2012/01/04/the-best-ways-to-find-health-insurance-if-you-are-self-employed-in-2012/

The New York Times: Finding Health Insurance if You Are Self-Employed

http://www.nytimes.com/2008/03/27/business/smallbusiness/27sbiz.html

USA Today: Self-employed Workers Can Reduce Health Insurance Costs

http://www.usatoday.com/money/perfi/columnist/block/2011-04-04-tax-breaks-for-self-employed.htm

Sicko: Facts About Healthcare in America

http://sickothemovie.com/_media/SiCKO_sickofactoids.pdf

American Journal of Public Health: Health Insurance and Mortality in U.S. Adults

http://pnhp.org/excessdeaths/health-insurance-and-mortality-in-US-adults.pdf

Chronic diseases affect nearly 50 percent of the adult population in the United States, with 1 out of every 2 adults having at least one chronic illness. In fact, chronic diseases cause 7 out of 10 deaths in the U.S., with the leading culprits being cancer, heart disease and stroke. Sadly, much of the burden of chronic illness in the U.S. is caused by preventable risk factors, such as obesity and cigarette smoke. Chronic diseases pose a rising concern in health care, and pose a significant risk for health insurance companies.

In spite of the high-risks of insuring individuals with chronic diseases, there are still some companies that are willing to take the risk.

The importance of health insurance
Living with a chronic disease can be challenging enough, balancing an ongoing illness, doctor’s appointments with family and work responsibilities. That challenge can grow exponentially if health insurance becomes a factor, and a person must now consider the possibility of mounting medical bills.

In the U.S., it is estimated that individuals with insufficient or no medical insurance prompt approximately half of all bankruptcy applications. Chronic diseases can require numerous medical treatments and possibly hospitalization, while at the same time adversely impacting an individual’s ability to hold steady employment.

The sad situation
Unfortunately, the U.S. lacks sufficient health care benefits to provide for those in need, relying heavily on private health insurance companies to provide for its citizens. In fact, it is the only industrialized nation to lack universal health care. This means that as the burden of chronic disease rises in America, there are even fewer resources available to provide government-subsidized care. The high cost of obtaining medical care may result in those putting off early treatment due to cost. According to an article published in Reuters, Americans with chronic diseases are far more likely to forego necessary medical care than those residing in other nations.

Securing insurance
How can a person obtain or maintain their current health insurance in the presence of a chronic disease? There is, unfortunately, no easy answer to this question. The reality is, private health insurance companies operate by minimizing their risks and maximizing their profits. They are not social welfare agencies, but businesses that are seeking to make a profit. It is true that many health insurance companies may deem the risks associated with chronic diseases to be too high and decline applications.

Though this may seem a dismal view of health insurance companies, a person diagnosed with a chronic illness may not be completely out of luck. There are some companies that are willing to approve insurance for a higher fee, or if the illness has achieved a stable status for some time. If the individual’s condition is deemed stable, the person may be able to obtain a medical certificate from their doctor, who would aid in securing coverage.

Health Care Reform
New laws are increasingly compelling private insurance companies to cover screening tools, such as blood pressure monitoring, cholesterol and diabetes tests. This also compels insurance companies to pay for screening of some cancers. Additionally, they need to provide for prenatal visits, routine vaccinations, and regular wellness appointments for both infants and children.

The 2010 Affordable Care Act seeks to make health care more accessible to Americans, including those with chronic diseases and those with pre-existing illnesses. These rules affect policies obtained on September 23, 2010 or later, and prevent insurance companies from imposing pre-existing condition exclusions on your children or rescinding your coverage based on an unintentional error during the application process. This act also prohibits insurance companies from setting lifetime limits on coverage, while restricting the application of annual limits.

Finally, this Act ensures affordable insurance is available for adults living with a pre-existing chronic illness through the Pre-existing Condition Insurance Plan (PCIP). The PCIP is available until 2014 in order to assist adults previously deemed ineligible for care. In 2014 a ban on restrictions against adults with pre-existing conditions will take effect.

Social security
When unable to secure health insurance and facing lack of employment, Social Security, or SSA may be a final resort for individuals living with a chronic illness. Information about application processes and criteria can be found at http://www.ssa.gov/disability/ or by telephone at 1-800-772-1213 (TTY 1-800-325-0778).

References
The Centers for Disease Control and Prevention: Chronic Disease Prevention and Health Promotion

http://www.cdc.gov/chronicdisease/stats/index.htm

Reuters.com: U.S. Trails Other Nations in Chronic Illness Care

http://www.reuters.com/article/2008/11/13/us-healthcare-comparison-idUSTRE4AC10720081113

Physicians for a National Health Program

http://pnhp.org/excessdeaths/

Social Security Online: Benefits for People with Disabilities

http://www.ssa.gov/disability/

U.S. Department of Health and Human Services: Health Administration Announces Regulations Requiring New Health Insurance Plans to Provide Free Preventive Care

http://www.hhs.gov/news/press/2010pres/07/20100714a.html

Health Reform.gov: Fact Sheet – -The Affordable Care Act’s New Patient’s Bill of Rights

http://www.healthreform.gov/newsroom/new_patients_bill_of_rights.html

While most industrialized countries have some form of universal health care for their citizens, this coverage does not typically extend to visitors. Health services and costs for travelers vary between countries, but could cost an unprepared traveler a significant amount of money if proper travel or international health insurance is not secured ahead of time.

Adding travel insurance
If a person already has health insurance, the first step is to determine whether their current policy includes travel health insurance. Some health insurance packages may include some travel coverage; however, if it does, it may be quite limited coverage. It is important to ask a lot of questions regarding the extent of current and additional coverage. Determine where travel is covered under the existing policy and if there are any restrictions related to location or health status, as well as whether there is additional insurance that can be purchased.

How to get travel insurance
When planning a trip abroad, it might be tempting to rely on the advice of the travel agent; however, they are not experts or brokers in insurance. The best bet is to enlist the services of a qualified travel insurance broker or to contact health insurance companies directly.

There are some companies that specialize in travel insurance or international travel. It is important to get quotes from a number of companies to ensure a fair price. Quotes may vary greatly depending on location of travel. This may occur depending on the particular health services available in the country of destination, public health concerns specific to the area or risk of injury.

One place to look when searching online is US Travel Association website which maintains a list of companies that are in good standing.

Traveling with a chronic disease
Health insurance costs and availability may vary depending on an individuals’ specific health needs. If an individual is diagnosed with a chronic disease, then it is essential that they check with the health insurance provider as to whether they will cover them for pre-existing conditions or whether the coverage is simply for new conditions. Most companies will not cover a previously existing condition and will not cover medical care related to one, potentially leaving the individual without adequate coverage during travel. However, there are some companies that will cover pre-existing illnesses, so it’s best to inquire and shop around. Some chronic diseases, if under control, present minimal risks to insurance agencies.  In these cases, individuals may be asked to obtain a doctor’s certificate to assure the insuring agent of the individual’s current health status.

It may be best to seek the help of a qualified health insurance or travel insurance broker for individuals who are diagnosed with a chronic illness. If a person with a chronic disease applies for travel health insurance directly to an insurance agency and is turned down, it may be difficult for them to secure insurance from another company.

References
Travel.State.Gov: Tips for Traveling Abroad

http://travel.state.gov/travel/tips/tips_1232.html

USA Today: How to Choose a Health Insurance Plan for Traveling Abroad

http://traveltips.usatoday.com/choose-health-insurance-plan-traveling-abroad-1555.html

Travel Insurance & Chronic Illness: What You Need to Know

http://www.epilepsyaustralia.net/userData/docs/Travel%20insurance.pdf

Reasons for deductibles
Health insurance deductibles are more than just a way for insurance companies to avoid having to pay out to the insured; they also put greater efficiency into the system. When people know they will have to pay a deductible, they are more likely to avoid frivolous hospital visits. Also, when smaller claims do not have to be submitted and processed, it saves administrative costs. All else being equal, deductibles lower costs and save everyone money.

How deductibles work
Health insurance deductibles work much the same as deductibles for auto and other forms of insurance. They are a non-reimbursable amount that must be paid by the insured before they can begin to collect from their insurance company for expenses. For example, if someone’s plan has an annual deductible of $1000; they will only be able to collect from their insurance company for the part of their annual medical expenses in excess of $1000.

It should be kept in mind that individual and family deductible amounts are different and that the deductible amount will start over again at the end of the year. Services such as doctor visits may be available without paying a deductible so everyone should examine their plans to make sure they are not paying when they do not need to.

On the other hand, some plans have separate deductibles for prescriptions and mental health services. Even paying the full amount of one deductible will not reduce another.

Other out-of-pocket expenses people face:

Coinsurance
This determines what percentage will be paid by the insurance company and what percentage the insured must pay. For example, if it is a common 80/20 split, the insurance company will pay 80% while the insured will pay 20%. Note that the coinsurance payments start after the deductible has been paid in full.

Copayment
Copayment is similar to coinsurance. However, it is a set amount and not a percentage.

Out-of-pocket limit
On the brighter side of deductibles and other payment expenses, plans generally have a yearly out-of-pocket limit. Once this limit is reached, the insurance company will take up the entire tab as long as the lifetime limit is not exceeded.

Optimal amount for deductibles
Many people regard deductibles as something to be minimized at all costs. While they are obviously not anything people want to pay, simply trying to minimize them is not always the best option. Medical deductibles were introduced to save money and can help the insured too if they reduce premiums more than they cost over time.

With this in mind, when offered a choice, the optimal deductible amount is primarily a math problem that will depend on the circumstances of the insured. Obviously, for those virtually certain to have medical expenses, the minimum possible deductible may be in order. Those who do not usually have medical expenses probably should take the gamble and go for the larger deductible since they are likely to save money that way over the long run.

Also, remember that deductibles can be paid from medical savings accounts, and the tax savings these accounts offer may be another reason to go with a higher deductible.

Of course, the best way to avoid having to pay deductibles is to stay healthy so one does not incur medical expenses at all. Perhaps keeping this in mind can serve as motivation to stay healthy.

While deductibles require some planning, they do keep medicals expenses lower than they would otherwise be. With a proper understanding of what they entail and the different options, medical expenses can help control costs. They are not the only out-of-pocket expense though so everything needs to be carefully looked at.

Secondary health providers
Those who provide secondary care are usually specialists who do not see patients unless they have been referred to them by their primary care providers. Examples of these types of providers include cardiologists and dermatologists. These physicians limit their practice in this way either under their own accord or because of payment agreements with insurance providers. Patients who are referred to these secondary health providers by physicians apart from their primary care providers need to insure their health plan covers it.

Secondary health insurance
In some situations, such as those who have two jobs or with married couples and dependents, it is possible to be covered under two plans. This is referred to as having secondary health insurance. There are various rules that apply so anyone who qualifies needs to understand them.

For those covered under two plans, the first step is to figure out which will serve as primary coverage. This is done by the insurers involved. If one is employed, the insurance offered by their own employer will generally be their primary coverage. The criteria used will depend on the types of health insurance and the final decision will rest with the insurance companies.

Both spouses having health insurance does not automatically mean they have secondary coverage. If one spouse has individual health insurance that does not insure others, the coverage will not extend to the other spouse in any way. Since having plans that cover more people is certain to cost more, those using secondary insurance need to consider if the benefits are worth the added expense.

Advantages of secondary health insurance
In some cases, the secondary plan may cover services the primary plan does not. This could be paying for a higher percentage of the care or for services the primary care does not. It also can be used in cases of very serious illness or injury when the benefits from the primary insurer have been depleted. It is necessary to check with the certificate of coverage to see what the benefits are.

Using secondary care
If extra benefits are available from the secondary insurer, the health care provider can bill them once the standard benefits have been received from the primary insurer. However, any health insurance deductibles or other fees from the secondary provider will still be applicable and must be paid. Also, only remaining costs that have not been paid by the primary insurer can be billed.

Words of caution
Apart from considering if the costs are worth it, one should be very careful to be upfront with the insurance providers to avoid any problems collecting. It is also paramount to keep careful records to avoid unwanted surprises. Finally, be sure the healthcare providers are informed of the primary and secondary coverage.

Be prepared for the task
Insurance companies are not exactly known for providing clear and concise information. However, considering the importance and expense of health insurance, understanding exactly what one is purchasing and knowing all the options is critical. There can be gaping loopholes even in good coverage. Those about to purchase health insurance need to resign themselves to some potentially tough reading and research.

Decide what is needed
With prices varying greatly depending on who and what is covered, the first step is to decide exactly what coverage is needed. For cases in which there are two people working, it needs to be decided who will be covered under what plans or if secondary health insurance will be taken out. Consider what coverage will be needed with everyone’s health in mind. Remember that the coverage and conditions will vary greatly with the plan. Be sure to buy what is needed and avoid what is not.

Deductibles and other out-of-pocket expenses
Deductibles can have a huge impact on the cost of insurance. In many cases, going with a higher deductible may be a better buy in the long run. Also, there are other out-of-pocket expenses such as copayments to consider. One has to do the math and make a best estimate as to what kind of coverage will be optimal over the long haul.

With all these potential costs, the lowest premium may not bring the lowest price over time. Carefully check all costs before deciding.

Check location and choice
HMOs and other types of managed care will limit which and the type of medical facilities that can be used. Make sure that the right treatments will be covered and that they will be within a reasonable distance. With the power of the internet, there are also more ways than ever to research the quality of care and other factors.

As a general rule, choice almost always costs more. It is up to the individual as to if cost or choice should receive a greater emphasis.

Employer plans
Since these are subsidized by the employer, they almost always offer the best deal. The plan can be kept but the subsidy will be lost if one changes jobs.

Prescriptions
Prescriptions coverage can virtually be thought of as separate insurance at times. It often has its own deductible and some only cover generic drugs. If taking medications, make sure the plan covers them.

Supplement insurance with healthcare savings accounts
These accounts allow users great tax advantages, and the money in them can be used for deductibles and other costs. Consider their benefits when choosing a plan but keep in mind that certain strings, such as how the money can be used, are attached to them.

Other coverage
There are situations in which one may need insurance out of network or when overseas. Know how the insurance coverage will handle these situations.

Doing the research, finding the right plan and purchasing health insurance consumes time and resources, but the costs of not having proper health insurance are much greater. There is nothing more important than health and one way to protect it is with the best insurance possible.

Although health insurance is very necessary in the modern world, it is a relatively new service. Starting in the 1930s with pre-paid hospitalization from Blue Cross, it grew into the massive industry it is today. The primary force driving this change has been the growing sophistication of medical technology creating more and increasingly expensive medical treatments that keep people alive longer than ever.

Types of health insurance
Traditionally, health insurance centered on indemnity or fee-for-service plans. With this type of insurance, the user is free to choose the physician so there is a lot of choice.

This form of insurance almost always has a health insurance deductible amount that must be paid in full for the year before the insurance can be used. At this point, the patient still frequently must pay part of the bill although the insurance company will pick up the lion’s share. While the company usually pays its portion directly, sometimes the patient is required to pay upfront and is reimbursed later. This will continue until the out-of-pocket limit is reached and the insurance company pays the full amount.

This is still the type of insurance that offers the most choice, but as the cost of medical care has risen, it has changed in some ways and has decreased in popularity vs. other forms of insurance. Patients are still generally free to choose their doctor and services, however, there are more restrictions and patients need permission for some services such as emergency rooms (unless they are unable to make a call). Preventative care is often not covered but restrictions on it have declined as the long-term, cost benefits have become more apparent.

Those using this indemnity insurance must be careful not to deliberately incur expenses that the insurance company might say they are not responsible for.

Managed care
Managed care has come about as a way to try to keep medical expenses under control. This insurance offers less choice but has cost as well as administrative advantages. There are several different types.

With preferred provider organizations (PPOs), patients are offered financial incentives to stay within the organizations network of providers. However, patients are still free to choose specialists outside the network.

Point-of-service plans are a lot like PPOs. Their major difference is that they require the patient go through a primary care physician (PCP) within the network of doctors if they want to go outside the network.

Of all the managed plans, the most common are health maintenance organizations or HMOs. With this type of insurance, apart from special circumstances, patients must use the physicians within the organization. HMO health insurance requires the smaller copayments, less paperwork and offers better preventative medicine. On the downside, there is less choice and often a longer wait time for services. Patients are either assigned or allowed to choose a primary care provider.

Other points to remember
Basically, more managed care brings lower costs but less choice and sometimes inferior service. Also, keep in mind that basic medical insurance covers most types of medical procedures while major medical covers the very long-term and high-cost injuries and illnesses.

The choice as to what type of health insurance is best depends on one’s options, ability to pay and the level of choice desired. Anyone about to purchase health insurance needs to consider as many angles as possible.

In 2009, the average cost for health insurance for a family of four was $13,375. Even though much of this is paid by employers in large and midsized companies as a benefit to employees, it adds to the cost of hiring workers and is an expense everyone must pay in the end regardless.

Premiums
Premiums are the beast everyone with any kind of insurance must face. It is the money paid to the insurance company in exchange for health and other types of coverage. Those paying these directly rather than having them paid by their employers are particularly aware of the painfully high costs, but the money for expensive medical care has to come from somewhere!

Other health insurance costs
As high as premiums are, they are not the end of the cost of health coverage. With costs rising, almost everyone now must also pay a deductable. This is the portion that those facing medical expenses must pay out-of-pocket (at their own expense) before the insurance company will start to pay. While insurance companies are obviously trying to reduce their payments, another principle behind deductibles is to encourage people to avoid unneeded trips to the doctor and reduce the amount of paperwork required to process smaller claims.

Coinsurance and copayment
There are still more costs though. Depending on the plan, it may be necessary to pay a percentage of any expenses, or coinsurance, even after the full amount of the deductible has been paid for the year. Also, many plans, particularly HMOs, charge a set free for certain types of medical expenses: copayments.

Ways to reduce the average cost of health insurance
Fortunately, there are ways to at least lessen the burden of health insurance. Consider the following:

Stay healthy
Staying healthy can reduce the cost of health care in some plans. Also, with fewer sick days and trips to the hospital, a healthy lifestyle will reduce average out-of-pocket expenses while also lowering the number of paydays lost to being sick. From quitting smoking, exercising and eating healthier, there are a lot of things the average person can do to improve their health. If not for one’s family, consider taking steps to live healthier for the pocketbook!

Increase deductibles
For many, especially those who live healthier lifestyles, it may make sense to increase their deductibles and other out-of-pocket limits. While one should do the math beforehand and estimate their likely costs, most can save more in reduced premiums than will be lost to increased deductibles.

Use managed plans
Some people have negative impressions of HMOs and other managed plans, but they often offer quality health care and lower cost. At least give them serious consideration.

Shop around
Those who have other options such as a spouse’s medical plan can often save by shopping around. Be certain to check out all available options for the best possible price.

Health Savings Accounts
Health savings accounts allow the employed to save part of their income pretax to use for medical expenses. While their rules can be confusing and there are penalties for withdrawing the money for other purposes, they offer great tax savings. They certainly should be used by anyone who is going to have out-of-pocket medical expenses.

Whatever becomes of healthcare in the US, the average cost of health insurance is likely to remain high. Therefore, it will always be important to understand the system as much as possible and look for ways to reduce costs.