Find Affordable Healthcare
Options for affordable health care in California

Private Insurance

Buy coverage through a group if possible. 

For most people, buying health coverage through a group leads to better benefits, lower prices and more security than individual coverage.  This is because, with individual coverage, insurers are allowed to base their rates or even deny coverage based on the individual's detailed medical history.

With group coverage, on the other hand, insurers determine the premium based on risk factors balanced over the general characteristics of the entire group, such as age and gender. And insurers are not allowed to deny coverage to groups or individuals in a group, while they are allowed to deny coverage to individuals.

The most common way to get group coverage in the United States is through an employer, but some trade associations, professional groups and other organizations also offer group health coverage for their members.  Voluntary coverage groups have become harder to maintain as health insurance costs go up, but here are two resources to look at:

Be careful buying health insurance on your own.

For people who aren't eligible for any group health coverage, the individual market may be the only way to get health insurance.  However, with few rules and little public oversight, the cost and quality of coverage sold on the individual market varies widely, and you are at greater risk of paying too much for too little coverage.  (For the latest news on efforts to reform health care so that everyone can get into a group plan, go to Health Access.) 

When you buy your own health coverage directly from an insurance company or broker, you provide a detailed medical history and the insurer sets a price based on your age, gender and medical history. This is called "underwriting."  In California, insurers are allowed to charge you more if you are a woman, refuse to cover you for a "pre-existing condition" for up to 12 months, or deny you coverage altogether. These practices are not permitted in the group market, however, and some states have outlawed them in the individual market as well.  (For more information on efforts to strengthen public oversight of the individual market in California, visit our section on Public Policy.)

Be wary of junk insurance.

People who cannot afford comprehensive coverage are often sold so-called  "catastrophic coverage" or "limited benefit" plans, which have lower premiums but higher co-pays and deductibles. 

Consumers buying "catastrophic coverage" are told they will have to pay out of pocket for things like routine visits and medications, but that the coverage will pay their bills in the event of a major illness or accident.  Consumers buying "limited benefit" plans are often led to believe the coverage is more comprehensive than it is. 

The danger is that California has no rules governing what can be sold as "catastrophic coverage" or "limited benefit," and these plans too often turn out to be worthless. 

Too often, consumers buy these policies thinking that they will provide care and protection, only to find out too late that the policies don't cover major health problems like cancer, because chemotherapy and MRIs are increasingly done in non-hospital settings, or set ridiculously low payment limits for things like hospital care, which can average anywhere from $2,000 - $5,000 a day, and diagnostic testing.

Read the fine print!  While catastrophic coverage may be better than nothing, be sure you know what you're buying, and that it really offers you the level of financial protection you need.

For example, if you have a net worth of less than $12,000 (including your car, retirement plans and savings but excluding home equity), and you purchase a "catastrophic" plan with a $5,000 deductible and an out-of-pocket maximum of $10,000, you would probably have to deplete all your savings and sell your car to deal with just one major medical incident. A chronic condition lasting several years would bankrupt you, even with your "catastrophic" coverage".

If you must buy coverage in the individual market, California's Office of the Patient Advocate has good resources to help you compare your options.

Other dangers to avoid in the individual insurance market:

Junk insurance. Insurance that doesn't cover a minimum level of primary, preventive and hospital care, so you're essentially paying to be uninsured.  See Consumer Reports' "Hazardous health plans:  coverage gaps can leave you in big trouble" for more information on how to spot junk insurance.  Visit our Public Policy section for information on efforts to restrict the sale of junk insurance in California. 

Phony discount health plans. Plans with low monthly fees that promise subscribers a discount on their health care costs at a participating network of providers. Too often, the "discount" is calculated from an artificially inflated price, so subscribers don't actually save any money. Also, provider networks have turned out to be much smaller than advertised. How to spot a phony discount health plan.

Deceptive sales practices. In California, all it takes to get licensed to sell health insurance is a background check, 32 hours of study of the California Insurance Code, and 24 hours of continuing education every two years.  Once licensed, brokers and agents are trained by the insurance companies they represent and paid on a commission basis, which creates a financial incentive to sell coverage. The commission structure itself encourges "churning," or frequent changes in coverage, by paying twice as much commission for the sale of new products as for the renewal of existing products.  These financial incentives can conflict with a consumer's need for accurate, unbiased information about what a plan will cover, how much it will really cost and whether it will provide enough health care and protection from bankruptcy for the consumer.  Consumers have a right to ask about broker compensation or commissions.  Check to see if your agent or broker is licensed, or file a complaint about an insurance broker, agent or company. 

Cherry picking and lemon dropping. People who buy coverage on their own generally pay more for less generous benefits than people who get insurance through a group plan. Insurers in the individual market have virtually unlimited power to pick and choose who to cover and how much to charge. They can refuse to cover people because of "pre-existing conditions," which they are not allowed to do in the group market. They can charge different rates based on age, health status, gender, and a variety of other factors, which they are not permitted to do in the group market.

Retroactive cancellation. Thousands of Californians have had their insurance policies cancelled retroactively ("rescinded") by insurers after using their health benefits, because the insurers were able to find mistakes on the application. Read health insurance application forms carefully, and make sure you understand each question before you answer it.  Learn what Health Access and other consumer advocates are doing to stop insurance companies from unfairly rescinding coverage.