Health Insurance Explained: Individual vs. Family Plans

12.09.2019 | 3 min read

Rick Notter is vice president, Individual Business Unit, at Blue Cross Blue Shield of Michigan. He joined Blue Cross in 2011 and has over 20 years of experience in the individual insurance business. A graduate of the University of Southern Indiana, Rick began his professional career as a television anchor and reporter in Indiana. He left his TV career and founded a sports newspaper covering Indiana University basketball and football, building it to a circulation of over 20,000 with subscribers in all 50 states and 21 foreign countries. After he sold the publication, Rick began his career in the insurance industry. Rick is the author of two books, the Hoosier Handbook and Sound Advice: Music’s Effect on Life, Health and Happiness. Rick has received awards from The Associated Press, the Society of Professional Journalists, The Midwest chapter of the Radio and Television News Directors Association, The Indiana Psychological Association, The Indiana Dietic Association, Writer’s Digest, and The Next Generation Indie Book Awards. He is also a 3-time winner of the Evansville Freedom Festival Chili Cookoff. Rick currently serves on the Board of Trustees for Detroit Public Television and is a past board member of the Indiana Association of Health Underwriters, the College Sports Publishers Association, and the Monroe County (Indiana) YMCA. Rick has four children (two of whom live in Michigan) and three grandchildren. When not working, Rick enjoys spending time with his children, traveling, or playing golf.

Insurance agent with couple looking through documents.

Health coverage can be obtained from an employer, association or health insurance marketplace. Depending on the circumstance, a person can apply for either an individual or family plan. Both have certain requirements based on age, family size and in some cases, income. When shopping for coverage, it’s important to understand the differences between the two.

Choosing an Individual or Family Plan

Since each plan has its own attributes, it’s critical to note changes in cost, accessibility and range of service. Whether it’s for an individual or group, the goal is to find the best fit for one’s health care needs.

How does coverage work?

An individual health plan covers one person, whereas a family plan covers two or more people, such as a spouse or children under the age of 26. This includes naturally born, legally adopted and foster kids in certain circumstances. Children over the age of 26 with a disability are also eligible for coverage under a family plan.

How does family size affect premiums?

Adding a spouse or a child to a health plan makes the monthly payment – or premium – go up based on the number of people covered. Yet, there is an exception for those with more members. If three or more children under the age of 21 are on one plan, the subscriber will only pay premiums for the three oldest.

Is there a difference in deductibles?

When calculating a deductible, family plans usually cost twice as much as the individual. The same applies to the out-of-pocket maximum, which is the most a person must pay during a policy period.

What are the Medicaid and Medicare restrictions?

Medicaid provides health coverage to low-income adults, children, pregnant women, seniors and those with disabilities. Medicare is available to older adults (age 65 and up), and some younger people with disabilities. Yet, Medicare is only available to individuals, while Medicaid is open to both individuals and families.

When do subsidies apply?

Individuals and families paying for their insurance without the assistance of an employer or association may be eligible for a government subsidy. It can be applied to a monthly premium to ensure coverage for those unable to afford higher payments. Subsidy requirements are based on one’s income and how it compares to the Federal Poverty Level, as well as family size and local health insurance costs.

Learn more about Blue Cross open enrollment for health coverage with the toolkit.

There’s also a special enrollment period available throughout the year. Qualification depends on the occurrence of major life events, including childbirth, changes in eligibility, change in residency, death of a plan member, loss of a job or loss of coverage through a family member. This is imperative for all to remember, especially those interested in adjusting or switching their current health care plan.

About the Author: Rick Notter is the vice president of individual business at Blue Cross Blue Shield of Michigan.

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Photo credit: Courtneyk