Group Health Insurance Vs Individual Health Insurance
If you are uninsured, you may be wondering what the difference is between group health insurance and individual health insurance.
Let's take a look at the difference.
Group coverage is very popular and what most people are used to because more than half of the U.
S.
population has it - this is the type of coverage provided by your employer or an employer-sponsored healthcare plan.
Group health insurance pros are as follows: o It is provided by your employer - This means the company you work for will cover some or all of the cost of your premium.
Sometimes the payment of your full premium is offered as an incentive for you to stay employed with your company.
o Coverage is guaranteed.
You cannot be denied benefits based on pre-existing conditions.
By law, insurance companies are required to enroll you into a group healthcare program no matter what your health status may be.
o The applications are short and simple.
Generally the application will just ask you for general information: name, address, contact numbers, the names of your dependents, etc.
You may be asked about pre-existing conditions or your current health status, but you will not be denied coverage because of it.
o The annual rate is guaranteed.
The insurance company your employer uses can only increase the rates once per year.
This is usually during what is called "the open enrollment period".
At this time your employer can choose to stay with the insurer you have, or switch to another.
Disadvantages of group health insurance are: o No coverage if you are terminated.
If you are laid-off or unexpectedly terminated, you will no longer be covered under your group plan.
If you choose to extend your coverage, you can pay your own premium and temporarily extend coverage through a type of insurance called COBRA, but this coverage is not permanent.
o Your employer makes the decisions.
This can be limiting because whatever insurer or health plan that is chosen by your employer is the type of coverage you will get.
If they choose to change insurers, there is a chance that your primary healthcare provider may not be included in the new healthcare plan.
This switch may force you to change doctors or pay out-of-pocket costs to the doctors you have become accustomed to.
Individual health insurance plans have some similarities and of course, there are a few differences.
You would purchase and individual healthcare plan for yourself and your family and you would be responsible for the payment of your premium.
This type of plan is available for newborns up to an individual's 65th birthday.
The advantages of purchasing individual health insurance are: o It is permanent.
Once you choose an insurer and a plan, it cannot be cancelled by any employer.
The only way you can be dropped from coverage is if you do not pay your premiums on time, or if you have falsified information on the application.
o More choices.
Unlike group insurance, you are in control of what company you choose for you and your family.
You are also the one to make the decisions to stay with your insurer or leave, should your rates increase.
Disadvantages are: o The application process is lengthy.
Medical history is required on all persons put on the plan and this involves an extensive questionnaire.
You may also be required to undergo medical testing and be asked to submit to blood or urine samples to determine your health status.
Because of the length of the process, it may take a couple of weeks to know whether or not you have been approved.
o Approval is not guaranteed.
Only a few states guarantee coverage, so if you do not live in New York, Massachusetts, or New Jersey, please be aware that insurers can be selective and have the right to deny coverage.
This can include denial based on the findings of your blood or urine test results.
o Your rates can increase.
An increase in premiums should be expected over the life of this kind of plan.
It should be budgeted into your expenses that rates will increase about 15% each year.
When it comes to overall cost, group health insurance will most likely cost less than individual health insurance.
If insurers have a large group of people that they are extending coverage to, it is easier for them to regulate costs.
However, when you choose this type of plan, you are at the mercy of your employer's decisions when it comes to the insurance company and type of coverage you are offered.
Let's take a look at the difference.
Group coverage is very popular and what most people are used to because more than half of the U.
S.
population has it - this is the type of coverage provided by your employer or an employer-sponsored healthcare plan.
Group health insurance pros are as follows: o It is provided by your employer - This means the company you work for will cover some or all of the cost of your premium.
Sometimes the payment of your full premium is offered as an incentive for you to stay employed with your company.
o Coverage is guaranteed.
You cannot be denied benefits based on pre-existing conditions.
By law, insurance companies are required to enroll you into a group healthcare program no matter what your health status may be.
o The applications are short and simple.
Generally the application will just ask you for general information: name, address, contact numbers, the names of your dependents, etc.
You may be asked about pre-existing conditions or your current health status, but you will not be denied coverage because of it.
o The annual rate is guaranteed.
The insurance company your employer uses can only increase the rates once per year.
This is usually during what is called "the open enrollment period".
At this time your employer can choose to stay with the insurer you have, or switch to another.
Disadvantages of group health insurance are: o No coverage if you are terminated.
If you are laid-off or unexpectedly terminated, you will no longer be covered under your group plan.
If you choose to extend your coverage, you can pay your own premium and temporarily extend coverage through a type of insurance called COBRA, but this coverage is not permanent.
o Your employer makes the decisions.
This can be limiting because whatever insurer or health plan that is chosen by your employer is the type of coverage you will get.
If they choose to change insurers, there is a chance that your primary healthcare provider may not be included in the new healthcare plan.
This switch may force you to change doctors or pay out-of-pocket costs to the doctors you have become accustomed to.
Individual health insurance plans have some similarities and of course, there are a few differences.
You would purchase and individual healthcare plan for yourself and your family and you would be responsible for the payment of your premium.
This type of plan is available for newborns up to an individual's 65th birthday.
The advantages of purchasing individual health insurance are: o It is permanent.
Once you choose an insurer and a plan, it cannot be cancelled by any employer.
The only way you can be dropped from coverage is if you do not pay your premiums on time, or if you have falsified information on the application.
o More choices.
Unlike group insurance, you are in control of what company you choose for you and your family.
You are also the one to make the decisions to stay with your insurer or leave, should your rates increase.
Disadvantages are: o The application process is lengthy.
Medical history is required on all persons put on the plan and this involves an extensive questionnaire.
You may also be required to undergo medical testing and be asked to submit to blood or urine samples to determine your health status.
Because of the length of the process, it may take a couple of weeks to know whether or not you have been approved.
o Approval is not guaranteed.
Only a few states guarantee coverage, so if you do not live in New York, Massachusetts, or New Jersey, please be aware that insurers can be selective and have the right to deny coverage.
This can include denial based on the findings of your blood or urine test results.
o Your rates can increase.
An increase in premiums should be expected over the life of this kind of plan.
It should be budgeted into your expenses that rates will increase about 15% each year.
When it comes to overall cost, group health insurance will most likely cost less than individual health insurance.
If insurers have a large group of people that they are extending coverage to, it is easier for them to regulate costs.
However, when you choose this type of plan, you are at the mercy of your employer's decisions when it comes to the insurance company and type of coverage you are offered.
Source...