Individual health insurance is a medical plan you buy for yourself or your family instead of getting it through an employer or a government program. Most people buy it on the ACA Marketplace, where premium tax credits can lower the cost, or directly from an insurer. For 2027 coverage you enroll during Open Enrollment or a Special Enrollment Period.
Updated October 2026 for the 2027 plan year
Key facts (2027 plan year)
- About 10.5% of people in the U.S. had direct-purchase (individual) coverage at some point in 2025, compared with 53.5% who had employment-based coverage (U.S. Census Bureau).
- Open Enrollment for 2027 individual coverage on HealthCare.gov runs November 1, 2026 to January 15, 2027 (HealthCare.gov).
- Premium tax credits are available only on plans bought through the Marketplace, not off-exchange (HealthCare.gov).
- For 2027 coverage, tax credits are limited to households between 100% and 400% of the federal poverty level, after the enhanced credits expired on December 31, 2025.
- ACA-compliant plans must cover 10 essential health benefits and can’t refuse you or charge more for a pre-existing condition (HealthCare.gov).
- The 2027 out-of-pocket maximum for ACA plans is $12,000 for one person and $24,000 for a family (CMS 2027 payment notice).
What is individual health insurance?
An individual plan is coverage you choose and pay for yourself, rather than through a job, Medicare or Medicaid. The policy is in your name, and it can cover just you or your spouse and children too. It stays with you if you change jobs.
Insurance professionals call this the individual market. Since 2014 the Affordable Care Act (ACA) has set the rules for most of it. Plans are sold in four metal levels (Bronze, Silver, Gold and Platinum), with Catastrophic plans for people under 30 or with a hardship exemption (HealthCare.gov).
A family policy bought this way is still individual-market coverage. If you are covering a spouse or children, read our guide to family health insurance as well.
Is individual health insurance the same as private health insurance?
Individual health insurance is one kind of private health insurance. “Private” means the plan is run by a private insurance company rather than a government program. Job-based plans are private too, so not every private plan is an individual plan.
The U.S. Census Bureau splits private coverage into employment-based and direct-purchase coverage. Direct-purchase is the individual market, including Marketplace plans. In 2025, employment-based coverage reached 53.5% of people and direct-purchase reached 10.5% (Census report P60-291).
| Type | Who runs it | Examples |
|---|---|---|
| Private, individual | Private insurer; you buy it | Marketplace plans, off-exchange ACA plans |
| Private, job-based | Private insurer or employer plan | Employer and union plans, COBRA |
| Public | Federal or state government | Medicare, Medicaid, CHIP |
People searching for private health insurance usually want a plan they control. On the individual market, that means ACA plans first, then non-ACA alternatives only with a clear view of the trade-offs.
Who buys an individual plan?
An individual plan is for anyone without affordable coverage from a job or a government program. The most common buyers are self-employed people, gig and 1099 workers, early retirees, part-time workers and people between jobs.
- Self-employed and freelancers. See our self-employed health insurance guide for income estimates and tax deductions.
- People leaving a job. Losing job-based coverage opens a Special Enrollment Period. Compare it with COBRA in COBRA vs. Marketplace.
- Early retirees who are not yet 65 and eligible for Medicare.
- Young adults aging off a parent’s plan at 26.
- Workers whose job-based plan is unaffordable. For 2027, employer coverage counts as unaffordable if the employee’s share of the lowest-cost self-only plan is more than 10.22% of household income (HealthCare.gov).
On-exchange vs. off-exchange individual plans
On-exchange plans are sold through HealthCare.gov or a state-based Marketplace and are the only individual plans that can use the premium tax credit. Off-exchange plans are bought directly from an insurer, agent or broker. ACA-compliant off-exchange plans keep the same core protections but get no income-based savings.
| Feature | On-exchange (Marketplace) | Off-exchange (direct) |
|---|---|---|
| Where you buy | HealthCare.gov, a state exchange, or an approved agent | Insurer, agent or broker |
| Premium tax credit | Yes, 100%–400% FPL | No |
| Cost-sharing reductions | Yes, Silver plans at or below 250% FPL | No |
| Pre-existing conditions covered | Yes | Yes, if ACA-compliant |
| Essential health benefits | All 10 | All 10, if ACA-compliant |
| When you can enroll | Open Enrollment or a Special Enrollment Period | Generally the same windows for qualifying coverage |
| Who it suits | Anyone who may qualify for savings | People above 400% FPL who want a plan not sold on-exchange |
HealthCare.gov puts it plainly: if you buy outside the Marketplace, you can’t get premium tax credits or other income-based savings. If there is any chance you qualify, start on the exchange. Our health insurance marketplace guide explains how it works in your state.
ACA-compliant vs. non-ACA individual plans
ACA-compliant plans must accept everyone, cover pre-existing conditions and include 10 essential health benefits. Non-ACA products, such as short-term medical, fixed indemnity plans and health care sharing ministries, can skip those rules. They are sold any time, but they are not a substitute for comprehensive coverage.
| Product | Covers pre-existing conditions? | Subsidy eligible? | What it is |
|---|---|---|---|
| ACA plan (on or off exchange) | Yes | On-exchange only | Comprehensive major medical coverage |
| Short-term medical | Often excluded | No | Temporary coverage for a gap; length set mostly by state law |
| Fixed indemnity | Varies | No | Pays a set cash amount per day or event; CMS calls it income replacement |
| Health care sharing ministry | Not required | No | Members share costs; not insurance and not obligated to pay |
The Centers for Medicare & Medicaid Services (CMS) describes fixed indemnity coverage as a form of income replacement that is not a substitute for comprehensive coverage. Michigan’s insurance regulator warns that sharing ministries are not health insurance.
Short-term coverage can bridge a short, healthy gap. For the rules in your state, read our short-term health insurance guide.
Before you buy a non-ACA plan: ask in writing whether it covers pre-existing conditions, prescriptions, mental health care and maternity care, and whether it caps what it pays.
Honesty.AI compares ACA, alternative and ancillary plans and checks your 2027 subsidy first.
What does individual health insurance cost?
What you pay for your own plan depends on five rating factors and your income. Insurers can price ACA plans only on where you live, age, tobacco use, plan category and how many people are covered. Your income then decides how much of the premium a tax credit covers.
Older adults can be charged up to three times as much as younger adults, and tobacco users up to 50% more (HealthCare.gov). Your health history can’t change the price of an ACA plan.
For 2027, the tax credit caps what you pay for the benchmark silver plan at a share of income. That share runs from 2.15% below 133% FPL up to 10.22% between 300% and 400% FPL (IRS Rev. Proc. 2026-26). Above 400% FPL, there is no credit. For one person, 400% FPL is $63,840.
Prices are also rising. A KFF review of 276 insurers’ filings found a median proposed increase of 15% for 2027, after a median 20% increase for 2026. That is why shopping beats auto-renewing. For more, see how much health insurance costs in 2027 and 2027 health insurance subsidies.
When can you buy an individual plan?
You can buy an individual plan during Open Enrollment, which runs November 1, 2026 to January 15, 2027 on HealthCare.gov, or within a Special Enrollment Period after a qualifying life event. Medicaid and CHIP take applications all year.
| Window | Dates or trigger | Coverage starts |
|---|---|---|
| Open Enrollment, early | November 1 – December 15, 2026 | January 1, 2027 |
| Open Enrollment, late | December 16, 2026 – January 15, 2027 | February 1, 2027 |
| Special Enrollment Period | Usually 60 days after losing coverage, moving, marriage, birth or adoption | Depends on the event |
| Medicaid or CHIP | Any time | Set by your state |
State-based exchanges can set later end dates, so check yours. Learn which events count in our Special Enrollment Period guide, and see every deadline in Open Enrollment 2027. HealthCare.gov also warns that you generally need a qualifying event to enroll outside Open Enrollment.
How to buy your own health plan in 6 steps
Buying your own plan takes about an hour if you have your documents ready. The order matters: check savings first, then compare plans on total cost, then confirm doctors and drugs before you pay.
- Estimate your 2027 household income and list everyone in your tax household.
- Check Medicaid, CHIP and tax credit eligibility on HealthCare.gov, your state exchange or with a licensed agent.
- Get quotes for every plan sold in your ZIP code. Our health insurance quotes guide lists what you need.
- Compare total yearly cost: premium after credit, deductible, copays, coinsurance and out-of-pocket maximum. Our metal tier guide helps.
- Confirm your doctors, hospitals and prescriptions are covered, and check the network type in HMO vs. PPO vs. EPO vs. POS.
- Enroll and pay the first premium. Coverage doesn’t start until you do.
More detail on each step is in how to choose a health plan.
How Honesty helps you compare individual plans
Honesty®, a licensed AI insurance agent from Honesty® Insurance Services, LLC (NPN 21094885), compares individual plans the way you would if you had the time. It checks savings first, shows every ACA plan in your area, and explains alternative plans honestly.
It works for you, not the carriers, and it is licensed in 49 states and DC. You can ask questions 24/7 by chat, voice or text. We never sell or share your data, and there are no spam calls. See how Honesty.AI works.
Find the right individual plan for 2027
Honesty.AI is the world’s first patented, licensed AI insurance agent. It compares ACA, alternative and ancillary plans for your needs, applies your tax credit and can enroll you in minutes, 24/7 by chat, voice or text.
If your employer gives you an allowance for your own plan instead of a group plan, read our ICHRA guide to see how it affects your premium tax credit.
If you work for a small employer that offers no group plan, our guide to health insurance for small business explains what owners and employees can do instead.
Once your main plan is in place, our guide to supplemental health insurance explains which add-on policies can help with a high deductible and which ones aren’t worth it.
State regulators warn that a health care sharing ministry can’t guarantee your bills will be paid and often limits pre-existing conditions, so compare your ACA options first.
Frequently asked questions
What is the difference between individual and group health insurance?
Individual health insurance is a plan you buy yourself. Group health insurance is offered through an employer or union, which usually pays part of the premium. Both are private insurance.
Can I buy an individual plan at any time?
Not ACA plans. You enroll during Open Enrollment, November 1, 2026 to January 15, 2027 on HealthCare.gov, or within a Special Enrollment Period. Medicaid and CHIP accept applications all year. Short-term plans are sold any time where state law allows, but they are not ACA coverage.
Is individual health insurance cheaper on the Marketplace?
For most people with household income between 100% and 400% of the federal poverty level, yes, because only Marketplace plans can use the premium tax credit. Above 400% FPL there is no credit, so on- and off-exchange prices for the same plan are usually similar.
Can I be denied coverage for a pre-existing condition?
Not for an ACA-compliant plan. ACA plans can’t refuse you or charge more because of a pre-existing condition. Short-term plans and other non-ACA products can.
Can I get my own plan if my job offers coverage?
Yes, but you only get a tax credit if the job-based plan is unaffordable or doesn’t meet minimum value. For 2027 it is unaffordable if your share of self-only coverage is more than 10.22% of household income.
Is private health insurance the same as individual health insurance?
Not exactly. Private health insurance includes both individual plans you buy yourself and job-based plans. Individual health insurance is the part of the private market you buy directly or through the Marketplace.
Supplemental coverage like critical illness insurance pays a lump sum after a listed diagnosis and isn’t minimum essential coverage.
See how accident insurance and hospital indemnity differ from fixed indemnity plans sold as alternatives to ACA coverage.
Adult dental isn’t an essential health benefit, so compare dental insurance options separately when you shop for an individual plan.
Keep learning: affordable health insurance, Obamacare explained, how health insurance works, family health insurance and health insurance quotes.
