You've finally realized your dream of opening up a one woman widget shop. But you worry that you might drop a widget on your foot so you figure you had better get individual health insurance.

What kinds of insurance can an individual get?

Pretty much the same types of insurance are available to individuals that are offered for groups: fee for service, HMOs and PPOs. The big difference is that these plans are much more expensive than group plans and you will have to fill out a health questionnaire and get a medical exam. If you have a pre-existing medical condition, the insurance company will not welcome you with open arms. Many will turn you down and even if you are accepted, you may have to wait at least six months for the insurance to kick in. Coverage for the pre-existing condition is often excluded.

I'm in good health but my premiums are high. How can I lower them?

If at all possible join a professional group, a credit union, or an alumni group which offers its member group health insurance. Now is the time to get together with your fellow widget makers. Watch out for any group that your insurance agent pushes. These are usually phony. If you are over fifty, you can join AARP and get group health insurance through them. If at all possible, pay your premiums annually rather than monthly or quarterly. Watch out for supplemental medical insurance being offered.

Your regular insurance should be paying for these conditions and if it isn't get a different insurer. If you are leaving a company, you may be able to convert from group to individual insurance. If you have left the company through no fault of your own you are eligible for COBRA. This program allows you to maintain your existing insurance for from 12 to 18 months. You can also lower your premiums by opting for a higher deductible, say $1000 rather than $500. If your widget business is slow getting going and you are poor, you may quality for medic-ade. One bright spot in all this is that most of your premium is tax deductible.

I dropped a widget on my foot and the wound didn't heal due to diabetes. My insurance company dropped me. What now?

You are now in insurance no man's land. Insurance companies hate diseases like diabetes, heart conditions, mental illness and many or most will not cover you at any cost. There is a thing called the risk pool (no its not a swimming program for diabetic widget makers). Twenty nine states have some form of this which is termed "state safety net options." With a pre-existing condition, you will have to wait from six months to a year for coverage to kick in. And it can be very expensive--up to $1500 a month with a $500 deductible. Many people just can't afford this so be very careful with those widgets.