Employed, but Without Health Benefits

Consider Coverage In Individual Plans, Savings Accounts

So you have a job or a job offer, but no health insurance to go with it?

You're definitely not alone.

About 74 percent of the nation's 45 million uninsured people worked in 2003, the most recent available U.S. Census data show. Most of them worked full time, year-round in small businesses. Others worked part time or in seasonal jobs.

Whatever their situation, the majority were not eligible for employer-sponsored health plans, which are typically the most comprehensive and the cheapest because employers pick up a big chunk of the premium payments.

Short of finding a new job with benefits, consumers do have places to turn for coverage. Choices include shopping for an individual health plan, signing up for the relatively new, tax-advantaged "health savings account" or enrolling in high-risk pools created by some states (including Maryland) for people who are rejected for coverage elsewhere.

If you opt for an individual plan, start by asking your home or car insurance agent to recommend a health insurance agent. You can also search for agents on the Internet or work with an online broker such as eHealthInsurance.com or Insure.com. Try calling an insurance provider directly to inquire if the company sells to individuals.

Always make sure the agent or health care provider is licensed in your jurisdiction. Check with your state insurance department on the agent's or provider's status. Also, be aware that individual plans are pricey and much less generous than most job-based plans. Prescription drug coverage will be limited. Maternity benefits will be tough, if not impossible, to find.

The big reason for the higher price tag: These plans are not subsidized by employers. In addition, buying for one person is much less efficient than buying for a group, as employers do. In the individual market, insurers do the negotiating, collect the premiums, pay the agents and do the underwriting. They also expose themselves to more risks with individuals than with groups formed by employers, which tend to have more average distribution of health risks.

So consumers who buy on their own get roughly 60 to 65 cents worth of coverage for every $1 they pay in premiums, compared with 85 cents for those with job-based plans, said Gary Claxton, a vice president at the Kaiser Family Foundation. The rest goes toward administrative overhead.

Because most individual insurance is medically underwritten, insurers have substantial discretion to decide what they will cover and for how much, Claxton said. (Underwriting is the process by which insurers assess an applicant's health before granting coverage.) An insurer might cover all but your asthma condition, for instance.

"But once they take you, they are not supposed to change your rates because you get sicker or develop an illness," Claxton said.

If all else fails, inquire whether your state offers a "high-risk pool" for people who have been rejected for medical reasons by individual plans and do not have access to group coverage or federally sponsored health insurance, said Karen Pollitz, project director at Georgetown University Health Policy Institute. Maryland created such a plan in 2002 as a unit of the Maryland Insurance Administration. The Maryland Health Insurance Plan is "the program of last resort," said Pollitz, who also sits on the board that governs the plan. "It's not cheap, but the price is not exorbitant either."

It's worth noting that some states or jurisdictions (including Virginia and the District) have "guarantee issue" laws that require insurers to provide some kind of coverage without medical underwriting. Premiums tend to be high because these policies accept people with health problems.

Karen Ignagni, president of America's Health Insurance Plans, an association that represents insurance companies, also suggests looking into health savings accounts (HSAs), approved by Congress as part of the 2003 Medicare law.

A provision in the law allows consumers to enroll in high-deductible plans and set up tax-sheltered accounts to help pay for what's not covered. People under age 65 who buy medical policies with deductibles of at least $1,050 for a single person or $2,100 for a family can establish an HSA. They or their employers could fund the HSA each year with an amount equal to the deductible, subject to a limit, and it could be used to pay health expenses or be invested. The money going in would be pretax dollars, and withdrawals for medical care would be tax-free.

Though the search for insurance might be time consuming -- and frustrating -- many experts say it's worth the effort. The Institute of Medicine reports that 18,000 uninsured Americans die each year because they get less care than they need and get it later than they need it.