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Individual Health Insurance vs. Group Health Insurance

By on May 17, 2010 in Individual and Group Health Insurance

A health insurance plan is a legal agreement entered into by an insurance company and an individual or an organization. As per the legal agreement, the insurance company agrees to pay a specified amount of medical expenses arising during the contract period in exchange of a payment termed as premium. The cost covered by the insurance company will purely depend on the premium amount and the type of Health insurance policy that you choose – for individual – or offered – for organization.

Before you decide on the exact type of health insurance plan you need or an organization need, it is always better to know the different coverage in market. It is good to know what you are eligible for and also the various benefits of that health insurance plan offered, which should help you to take the correct insurance plan.

Below is a short illustration to make the distinction between the individual and group health insurance more clearly:

1. Individual Health Insurance. Individual health insurance plans are designed for unemployed or self-employed people who paid premium in exchange for health insurance coverage.

Individual health insurance plans are expensive, because the cost involved in medical expenses is very high, the narrow spread of risk makes the risk factor of the insurance company become higher and the premium payment comes from a single individual. The individual who takes the health insurance also needs to go through certain medical tests (as per the insurance company) in order to get the health insurance plan, but under individual health insurance you can also cover for your spouse or children.

In relation with the high cost of an individual health insurance plan, the insurance company usually let you choose Health insurance plan that you need, so as to adjust with your budget and you can renew it annually as far as you need and you like.

2. Group Health Insurance. Group health insurance plan is designed for large number of people and in majority of cases for companies or organizations. Group health insurance is usually taken by company or organization for their employees as an added advantage for the employee and a benefit given by the employer. Since the premium amount is usually paid by the company or organization, majority of the employed people will have group health insurance plan.

In group health insurance, the insurance company covers everybody under the group and this effect in the larger span of risk which makes the risk factor of the insurance company become lower. As the insurance covered a lot of who are assumed to have the same level of risk, then no pre medical test is required for group health insurance. The previous condition plus higher receiving from a single source – whereas they are collecting premium from everybody in group – resulting in lower rate of premium amount, which is make sense for insurance companies as they are covering a large group of people and probably they will end up paying or covering medical expense for a relatively less number of people.

However, in a group health insurance the plan is selected by the company or organization for all the employees and incase you leave the company or organization where you work, you will not be entitled to claim the insurance benefit any longer.

In the end, I would recommend that every individual should have a health insurance plan. You might be in good health or rarely visit a doctor but nobody can predict what is going to happen tomorrow. One illness or even an accident can result in high medical expense which can upset your financial situation. However, just by paying a premium you can be assured that the amount specified by the insurance companies will be paid by them and you can live in peace.

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What differentiates individual from group health insurance?

By on May 11, 2010 in Individual and Group Health Insurance

In our everyday lives, we must make many important decisions, but there are few as important as deciding what kind of medical insurance to get. We all want to know that we will have the resources we need available to us when we require them, and so we’re confronted with some challenging questions when it comes to deciding what kind of individual health insurance to seek. One such question is whether to choose individual or group health insurance. If you don’t know all of the facts, this can be a serious roadblock for you. This article will help you to better understand the similarities and differences between these two very unique types of insurance.

To begin, let’s explore what these types of insurance are. Individual health insurance consists of coverage bought by a single individual for him- or herself and/or that person’s family. The name can be misleading, as individual health coverage can actually cover more than just a single person. Group health insurance is the kind of insurance designed to be offered by an employer to an employee. These plans can be bought by individuals, or they can be set up by a company for its employers, or sometimes both. The law mandates what kinds of benefits must be included in group policies, and health insurance coverage is therefore often more extensive than the kind you are likely to get from an individual policy. A couple of examples of this extensive coverage are maternity coverage and treatment for substance abuse: just a couple of perks you’re less apt to receive should you choose to buy an individual medical insurance policy. Extra coverage like this is sometimes referred to as “optional rider.”

One of the primary concerns when buying any insurance policy is cost, and it’s important to take this into account when making considerations. In general, the cost of an individual policy will be more than that of a group policy, and the benefits you get for your money will be fewer. Furthermore, you will probably be required to pay out a higher deductible for individual medical insurance than you will for group insurance, and cost-sharing (the fees paid to medical caregivers for their services) are usually higher, too. This can be a deciding factor for many people weighing the pros and cons of medical insurance policies.

Another advantage of a group insurance policy is that companies cannot refuse to cover people who suffer from pre-existing conditions in the way that individual insurers can. You cannot be turned down if you have a disability or a serious ailment. With an individual policy, applicants will frequently be denied coverage on the grounds that they are “uninsurable” due to pre-existing conditions: something else to keep in mind when deciding what kind of insurance to get.

One of the drawbacks of a group plan is that your insurance package may include features that you will never have occasion to use. This may make the group plan impractical for younger or healthier people who are less likely to require as frequent or as intensive medical attention. Such people might then be interested in purchasing a less costly individual plan.

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The 5 Major Differences between Individual and Group Health Insurance

By on April 23, 2010 in Individual and Group Health Insurance

Individual Health Insurance vs. Group Health Insurance – A Guide to the Differences in the Plans

When shopping for insurance it can be difficult and intimidating when trying to find out what policy and plan is the best one for you. Health insurance rates are not the same in each state. This is also true when you compare businesses and even each individual person. There are many factors that play into what, where and for how much you can get the best deal. Two different options that you can look at are individual health insurance and group health insurance.

Individual health insurance is a plan where you as a single person are applying for coverage. The rate will be based on the history of your health and can be rather expensive. Most people get their health insurance coverage provided for them through an employer or even a government program; However, about five percent of the population obtains health care coverage through an individual plan.

Group health insurance differs in that the insurance gathers a group of clients together and offers a lower rate to the group. This type of insurance is offered by an employer to qualifying employees as a type of benefit for working for the company. Group health insurance is the most common for the United States population.

An important difference that is important to look at is what you must do in order to obtain either individual or group insurance. If you wanted to purchase individual health insurance you would be checked to see if you qualified. This includes participating in a medical examination as well as completing a questionnaire on your health and any problems that you may have. The results of these two things will be looked at and used as a deciding factor as to whether or not you are insurable. This can be frustrating because you may be turned down due to your age, income, habits, and medical history. Group insurance works differently in that an insurance company is incapable of refusing you health insurance when company group coverage is involved. If you tend to have poor health or habits that aren’t looked at in the best of light ( such as smoking), group insurance may be the best option for you to consider.

Along with qualifications, just how much money you will be forking out for your coverage is extremely important when taking different options into consideration. Take a look at individual coverage. With this option you are likely to have a higher deductible, which is the amount of money that you pay prior to any health insurance benefits. You will also have a higher chance of having to pay more for cost-sharing. Cost-sharing is fees that you pay at the time of service directly to the medical practitioner. Now lets look at group coverage. It’s more likely that you will spend less participating in a group plan. Rates can be more easily cut within a group. Because there are more people, the risk that the insurance company is taking can be spread out over multiple bills where as when it’s only an individual person getting coverage they are entirely responsible to cover all risk. When an employer is providing group health insurance they are the ones that actually end up paying the largest amount money to the insurance company. This means that those employees receiving the benefits are left with only a fraction of the percentage to pay.

Now that you know the basics of who qualifies for what and what the prices tend to be like, lets now discuss some other important facts involved with purchasing insurance. Features of the particular health coverage, for example, are something that you should look into. If you’re going to be paying for something it’s important that you benefit from it and that it’s not going to waste. In the case of a group policy the employer is the one that makes the decision on what benefits will be offered. Everything that is or is not covered is determined by them and will ultimately create the amount of your premium. The plan that your employer selects could actually offer you a lot of things that you don’t actually need but still end up paying for. In the case of individual health insurance you get to personally work to get the coverage that you want because you are the only one participating and you know just how much you are willing to spend.

In short, you should carefully look over the policies of both types of health insurance plans before choosing the one that is right for you, and you should look over the pros and cons of your particular insurance plan.

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The Key Differences between Individual and Group Health Insurance Coverage

By on April 21, 2010 in Individual and Group Health Insurance

With the recent coverage of the American health care debate, there has been a lot of talk about the differences between individual and group health insurance. The main difference between the two comes down to bargaining power.

In a group health insurance plan, one organization, such as an employer, non-profit or government, can negotiate better rates, and better services for those rates. This is because with group health insurance, the sheer number of people being covered is a big enough draw for the insurance company to offer discounts. Another reason that insurance companies would offer discounts is because as more people are in the average group, the less it will ultimately cost to cover whatever people in that group may get sick.

One key downside to group health insurance coverage is that once the person being covered leaves the group, (i.e. leaves their current employer), the coverage stops. Due to laws in the United States know as COBRA, employees can opt to continue receiving their group health insurance plan, but the employee then must pay not only the portion of the cost that they had been paying, but also the portion of the cost that their employer was paying. This sudden cost increase greatly reduces the benefit of the COBRA coverage.

On the other side of the coin, individual health insurance plans are negotiated by one party, usually the head of a household for his or her family. Since the individual is negotiating for his or herself, he or she does not have the bargaining leverage that those who negotiate group plans do. As a result, individual plans tend to be more expensive and offer less coverage.

Additionally, individual health care options may deny coverage to someone seeking it due to pre-existing conditions. This makes sense because insurers do not want to be on the hook for someone who will almost certainly cost them more than they will receive from them. Group health care plans avoid this problem for the same reasons stated above: the risk to the insurer is spread among many people, both healthy and unhealthy.

One advantage to individual health care coverage, though, is that a person seeking coverage can more closely cater their health insurance to their own needs. For example, a man seeking an individual plan clearly would not need coverage for visits to the gynecologist!

The health care bill recently passed in America seeks to almost entirely eliminate the differences between individual and group health insurance plans. It does so by creating health care exchanges, set up by the government. The exchanges would basically be a way for individuals to obtain the bargaining power that groups such as employers have when negotiating rates and coverage.

The advantages of group health care are apparent, and the shortcomings of individual heal care plans are equally clear. Still, some are forced to seek out individual care, and negotiations can be slightly more personalized in the case of the individual. The staggering number of uninsured is primarily due to the high cost of the individual market, and the fact that many low-income earners have jobs that do not offer group health care benefits.

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