Monthly Archives: September 2017

Health Insurance Know the Facts

When it comes to preparedness, health insurance will always be your best bet. Because one cannot easily determine when he or she will need medical help, having a reliable health insurance plan will be very helpful in covering the costs of treatment and care. There are many factors one must consider before signing up for a health insurance policy. Since there are different types available, one needs to carefully assess his needs and also manage his allotted budget.

What do you need to know about health insurance? How can this help you and your family in times of need? Read on to learn about interesting facts about policies and coverage, so you can make the informed choice when buying health insurance for you and your family.

o In the United States, it has been reported that nearly 45 million Americans have no form of health insurance whatsoever. This accounts for about 15 percent of the total population as of the year 2006. As mentioned by the Centers for Disease Control and Prevention (CDC), among the total population of Hispanics, 32 percent were uninsured. This is compared to 19 percent of all African-Americans, and 10 percent of all whites who do not have health insurance coverage.

o Of all the uninsured persons in the United States, about 7 million were minors, below the age of 18. This accounts for about 10 percent of the below 18 population of the country, as reported by the CDC. According to the new health insurance plan proposed by the administration of President Barack Obama, about $87 billion of government funds will be allotted for the improvement of state insurance programs, as well as the SCHIP, or the State Children’s Health Insurance Program. This will expect to reduce the number of uninsured children in the country by up to 72 percent, giving minors better opportunities for health care.

o More on the uninsured: what percentage of the population ages 19 to 64 (non-elderly) do not have health insurance? The Kaiser Health Foundation reports that approximately 20 percent of adults in this age group are without any form of health insurance, as of the year 2007. Which states have the most number of uninsured adults? The same site reports that New Mexico and Texas top the list, with about 30 percent of people in this age group without health coverage. On the other hand, Massachusetts has the least uninsured adults, which only comprise about 10 percent of the total age group.

o Which states have the highest number of uninsured children, who are from ages 0 to 18 years old? As the Kaiser Health Foundation statistics present, Texas has about 22 percent of children without health insurance, with Florida following with 19 percent. Massachusetts also has the least percentage in this category, with only about 5 percent of children without health coverage.

o According to the Insurance Information Institute (III), about 34 percent of the nation has their own private health insurance plans, while nearly half of the population rely on government funded insurance programs. To be more specific, 19 percent are under MediCare, 15 percent under MedicAid and SCHIP, and another 12 percent from other select public insurance providers.

o The National Association of Insurance Commissioners reported in 2007 the insurance companies who have written the most premiums as of that year. Topping the list were UnitedHealth Group owning 11.7 percent of the market share, and WellPoint Inc. Group, with 9.75 percent of the market share. Kaiser Family Foundation follows in third with 7.7 percent market share in that same year. Among the oldest health insurance providers in the country, Blue Cross, is the ninth on the list, with approximately 1.72 percent of the market share.

o When comparing individual insurance plans and group insurance plans, you can expect to save more if you purchase multiple policies. However, according to some people who choose individual policies, they are able to tailor their plans to be in tune with their specific health needs. You can learn more on the pros and cons of these two types of health insurance when you consult with an insurance agent.

o During the economic recession in the United States, there were millions of people who have become unemployed. However, thanks to the new administration and the initiatives of President Obama, these employees can still reap the benefits of their health insurance plans, as the government intends to allot $25 billion. These will cover for as much as 65 percent of each employee’s health insurance premiums, according to a report by Reuters.

o Speaking of employment, even the insurance industry is responsible for contributing to the number of jobs available for people in the United States. In two of the largest states in the country, hundreds of thousands are able to find work through many opportunities provided by the state. In California, about 300,000 employees are in the insurance sector, while in Texas, the figure has reached above 216,000 as of 2006. Other states included among the top in the list are Florida, New York, Pennsylvania, and Illinois.

Before Choosing Health Insurance

Understanding Health Insurance

This article is written to assist consumers sift through multiple options, plans, exclusions and summaries of benefits and understand what Critical questions you should ask when researching health coverage. Finding the most beneficial health insurance plan to meet your unique and individual needs is difficult. This guide will help consumers understand the basics of health insurance and what to look for when comparing plans.

14 Costy Mistakes You’ll Want To Avoid

1-FREE – Do You Have a “30 Day FREE Look Period?” Can you get your $ back if you are not happy?

2- DEDUCTIBLES: How many deductibles do I have per year? Some plans will have more than 1 deductible per person per year!

3- NETWORK RATES: Prior to your deductible being met, will your insurance company extend their discounted network rates to you? Example: Insurance Company A – 5 stitches to finger – Total cost $2000, patient responsibility, $800, or Insurance Company B – 5 stitches to finger – Total cost $2000, patient responsibility, $2000. (no network break).

4- NEGOTIATED RATE: What is the AVERAGE negotiated rate? (Sometimes referred to Network Rate – very very important!)

5- UNCLEAR TERMS Is your $100 “co-pay” for an Emergency Room visit REALLY $100? Some companies the $100 copay is more like a fee AFTER your deductible, and you’ll still pay the co-insurance and the $100.

6- LIMITS on benefits, for example: $500 limit or $250 limit on Emergency Room expenses. $50 limit on Dr. Visits. Once the Limit is reached, YOU pay everything else out of pocket. $500 limit on hospital expenses per day (quick way to bankruptcy!)

7- PREVENTATIVE – Will you have to meet your deductible, or do you have a 1 year waiting period for preventative? Do you want to wait 1 year before you can have your female exam, or a mammogram?

8- TRAVEL – If you are out of state, are you covered for illnesses? If you eat something that doesn’t agree with you and become very sick and need a doctor, will you be covered? (Not just life threatening emergencies.)

9- RATE INCREASES – I am buying a “fixed rate”. Ask yourself if it makes sense to pay extra over the next 2 – 3 years for a fixed rate? Make sure your rate is set for at least 12 months but does it make sense to pay in advance for a fixed rate? Sometimes plans will naturally go down in price, so does it make sense to pay extra to have a fixed rate?

10- SUPPORT – After I buy this plan, MAY I CALL MY AGENT’S DIRECT LINE with billing issues, or plan questions, or technical problems, or claims questions or concerns of any kind?

11- EXCLUSIONS – Read the “Exclusions” in your plan. Are the exclusions available for you to read? Is there an exclusion that you cannot live with? For example: exclude well baby visits. Is this an exclusion that you didn’t catch in the plan details?

12- MAJOR MEDICAL plans are designed to pay for MOST of your medical expenses when you become ill or injured. You’ll want a Major Medical plan from a reputable company that has “Credible Coverage.” Discount plans or Limited Medical Plans are NOT designed to protect your losses like Major Medical plans are. They are marketed as “Insurance,” but you MUST ask, is it a Credible Coverage Major Medical plan?

13 – MATERNITY – Maternity plans. Do your homework. Does your plan have an outrageous deductible for maternity? Do you have a waiting period of 12 months, 24 months, or more? How many doctors do you get to choose from “In Network” that can deliver your baby? Are you happy with the choices of Doctors in the network that will deliver your baby? What if your doctor is not on-call the night you go in for delivery?

14- MEDICATIONS – Is there a limit on how much the insurance company will pay for medications. If you become very ill, this could be a very big problem. Do your research, ask questions. Do you have a deductible on medications?

*Did you know that key information about how coverage works is not always disclosed? *When comparing plans, is the language confusing? Why is the language confusing? *Did you know that many consumers compare prices of health insurance plans, but cannot always tell if they are comparing “apples to apples.”

How to avoid Medical Bankruptcy!

According to a Harvard Law and Harvard Medical School study, they found that ½ of all bankruptcies are caused by illnesses and medical expenses. If you are a breadwinner for yourself, or breadwinner for a family or spouse, and the breadwinner gets sick, you may loose your medical coverage, and a way to pay for your day to day expenses.

When you are shopping for a health plan to protect yourself financially from medical bills and bankruptcy, there are many things to consider. Probably the most important thing is to consider is what “Type” of plan you are getting. There are several types of health plans that are available. If you buy a plan that is not “Underwritten” and is “Guaranteed Issue” you are not buying a Major Medical Plan. Major Medical plans will go through a process called “underwriting.”

Some plans will pay a certain dollar amount for a procedure, or a certain dollar amount per day while in the hospital. IT IS CRITICAL you understand the implications financially if choosing a non Major Medical plan. Your chance for greater personal losses including Bankruptcy exist with non-Major Medical plans. If you are shopping price with health insurance, and you decide on a discount or limited liability plan, YOU HAD BETTER UNDERSTAND WHAT YOUR RISKS ARE if you end up needing to use that “insurance.”

Major medical plans are designed to cover most of your hospital expenses if you become hospitalized.

Do you have a disability plan? This type of plan will pay your day to day expenses if you loose your job due to an injury or illness. This should be a very important consideration when getting health insurance. If the breadwinner loses his/her income while injured or ill, how will the day to day expenses be paid for?

The 6 costly misconceptions about Health Insurance

1 – I don’t need medical insurance, I’m a healthy person, I eat right, exercise and take care of myself. This is risk-taking. You are gambling your financial future.

2- I’m not getting insurance because There is no benefit before my deductible. Some Major Medical Plans will A) extend their network rates to you before the deductible is met, but not all. Another benefit before your deductible is met is B) the copays for Dr. Visits and C) Copays for Prescription coverage. Again, check the individual plan.

3- If I get sick, or now that I’m pregnant I’ll get insurance. Once you are ill or pregnant, depending on the illness, you may or may not be eligible for health insurance. Certainly once pregnant, you will not be eligible for an individual plan. The insurance company will always reserve the right to underwrite your medical condition and elect to take you on as a risk, or not. You wouldn’t expect to run out and get auto insurance after you’ve banged up your car and have them pay for it. For this reason, it is important to not let your Major Medical insurance lapse for more than 63 days.

4 – I will get stuck with a bill that I thought should have been paid for, or the insurance company should have paid. Here again, you must do your homework on the plan you intend to purchase. Look for Limits, deductibles, exclusions, co-pays, and understand these details. Also, if you come into a plan with pre-existing conditions and did not have continuous “credible coverage,’ you can expect to pay for your pre-existing conditions for 1 full year.

5- I want excellent care at a cheap price. If you want Major Medical, shop between the competitors, and get the most for your money, but don’t expect the same benefits in a discount plan as in a Major Medical Plan.

6- I’m waiting for the President to take care of this mess. It is not a good idea to wait to purchase medical insurance ever!

Important to Know:

Many People Feel That Health Insurance Companies are Greedy and Corrupt According to the Wellpoint Institute of Health Care Knowledge:

“Popular theories suggest that health insurance premiums are driven by an aging population, excessive insurer profits or medical malpractice. Objective research, however, clearly indicates that these factors have a minimal impact on the high price of health insurance premiums.

If meaningful health care reform, including health care cost containment, is to occur, emphasis must be placed on the real drivers of increased health care costs and concomitantly, health care premiums. These include the following key factors: such as

* Advances in medical technology and subsequent increases in utilization

* Price inflation for medical services that exceeds inflation in other sectors of the economy

* Cost-shifting from people who are uninsured and those receiving Medicaid to the private sector

* High cost of regulatory compliance

* Patient lifestyles, such as physical inactivity and increases in obesity.”

Other Important Facts

Will they check my credit score. NO

Will they require a physical or blood work? In most cases, NO.

All insurance companies are the same. No they are not.

My Premiums keep going up. You can do very little about increases in health care costs. You may want to change plans or increase your deductible to try and save money. Try and find a company that will guarantee their rates for at least 1 year. No need to pre-pay for future rate increases.

Definitions:

DEDUCTIBLES (Phase 1)- Money that you pay out of your pocket before traditional insurance begins. Ranging traditionally from $0 to $10,000. Usually if you choose a lower deductible, your premiums will cost more, if you have a higher deductible, your premiums will be lower (you are assuming a higher risk in exchange for lower premiums).

CO-INSURANCE – (Phase 2) – After you meet your deductible, you’ll pay a “co-insurance.” “Co” meaning 2, two entities will share the burden of the bill; usually you’ll see “co-insurance” as a 70/30, 80/20, 50/50, 60/40, 90/10. The larger portion of the co-insurance the insurance company will pay, the lesser portion you will pay.

MAXIMUM OUT OF POCKET – (Phase 3) – After you’ve paid your deductible, and then your portion of the co-insurance, you finally reach your maximum out of pocket. From this point on, the insurance company will pay the rest of the bill. (Major Medical Plan.)

CO-PAY – A flat dollar amount to be paid at the Doctors office. Sometimes referred to as a “first dollar benefit” (before deductible). Meaning, you pay a flat $30 or $20 or $40 dollar copay, or whatever the copay is, and the visit is paid in full. WATCH FOR LIMITS! Make certain the copay is a flat dollar amount paid BEFORE your deductible.

HMO is Health Maintenance Organization, usually a limited regional/geographical area, with a certain number of providers in the HMO. You will select 1 Dr to manage your care, and your Dr. will “help you decide” if you need a referral or not. HMO’s usually have very low deductibles and copays.

PPO Insurance is Preferred Provider Organization. You may visit anyone you wish in the network, still you must know the geographical area of your Network, even with a PPO plan. If you are on vacation and become ill, will your plan out of state cover you (in network)?

CREDIBLE COVERAGE In order to cover your pre-existing conditions when moving from one plan to another, you must have a Credible Coverage Major Medical plan. It is a document given to you from your insurance company as proof that you had a Major Medical plan protecting you from a start date to an end date. You must not go further than 63 days from one Major Medical Insurance coverage to the next, if you do go beyond the 63 days, you will have a pre-existing condition clause in your new policy that states you will not be covered for any of your pre-existing conditions for 1 full year (at a minimum.)

If you go beyond 63 days without “Credible Coverage,” the new insurer will look to your previous 6 months (average) health history and condition, and not cover you for any ailment you have (pre-existing.)

Now don’t be mistaken, that when you want to go from one insurer to the next, if you were covered with “credible coverage” that you are automatically guaranteed a plan. This is not true. You will still need to be underwritten, and the new company is not obligated to take you on as an insured if you don’t fit their underwriting guidelines.

Please Note: This Free Consumers Guide is meant to be used as informational only. The author herein will not accept liability for any circumstances in which an outside company may define their features and benefits differently than in this document. Consumers will accept this document as informational only, and not a legal document. Consumers will be held responsible for their own purchases, and not hold the authors in this document liable for any actions taken by any consumer. Consumers must verify the plan in which they purchase, and will not hold the information in this document as a specific reason to take or not to take a certain action. This document is produced by a licensed health agent. The 14 Costly mistakes you should avoid when selecting your health plan.

Health Insurance Buyer’s

Buying Shopping for health insurance can leave many people confused. Knowing which insurance company to choose or which insurance plan is the best may seem daunting impossible. But once you know the basics of health insurance, choosing the right health insurance plan is simple easy.

This article will provide some of the most basic and helpful tools and explanations for health insurance shoppers. First, it is important to learn about helps to understand the different types of health insurance plans and their benefits and drawbacks. Plans differ in the amount you pay out-of-pocket, which doctors you can visit, and how the your insurance bills are paid. Besides just helping you choose the most efficient and cost-effective plan, we’ll teach you about another way you can save on health insurance: a Health Savings Account. Additionally, it is important to learn about dental insurance as well. Many health insurance plans do not include dental insurance under their benefits, so we’ll go over how to shop for and obtain separate dental coverage. Then it is important to learn about ways you can save on health insurance. There are several ways you can save including Health Savings Accounts and Discount Cards. LastlyAnd finally, don’t forget to compare plans before you make your decisionwe’ll explain why it’s so important to put your new knowledge to good use by comparing health insurance plans.

Types of Health Insurance Plans

Health Maintenance Organization (HMO) Plans

Generally, HMOs have low or even no deductible and the co-payments will be relatively comparatively low as well. You pay a monthly premium that gives you access to coverage for doctor appointments, hospital stays, emergency care, tests, x-rays and therapy. You will have to choose a primary care physician (PCP) within your insurance provider’s network of physicians, and in order to see a specialist you need to receive a referral from your PCP. Under an HMO plan, only visits to doctors and hospitals with the insurance company’s network of providers are covered; you’ll have to pay for visits if you go to an out-of-network doctors or hospitals your insurance will not cover the costs.

Preferred Provider Organization (PPO)

Plans Under a PPO plan, you will use the insurance company’s network of doctors and hospitals for any services or supplies you need. These healthcare providers have been contracted by the insurance company to provide services at a discounted rate. Generally, you will be able to choose doctors and specialists within this network without having to choose a primary care physician or get a referral. Before the insurance company will start paying for your medical bills you will usually need to pay an annual deductible. Also, you may have a co-payment for some services or be required to cover a percentage of the total medical bill.

Point of Service (POS) Plans

A POS plan is a combination of the features offered by HMO and PPO plans. You are required to choose a primary care physician, whose services are not usually subject to a deductible, but your PCP can refer you to out-of-network specialists whose services will be partially covered by your insurance company. Additionally, POS plans usually offer coverage for preventive healthcare, which includes regular checkups. Your PCP will be able to give you referrals for any specialists. If these specialists are out-of-network you will need to pay out-of-pocket and then apply for reimbursement from the insurance company. With a POS plan you will benefit from some of the savings of an HMO and will have greater flexibility in choosing healthcare providers, similar to PPO.

Dental Insurance

It is important to get a dental insurance plan along with your health insurance plan. In order to keep your teeth and gums health you need regular visits to the dentist. Without dental insurance, the cost of dentist appointments will be much higher making it difficult to keep up with the payments. Dental insurance is similar to health insurance in that each month you pay a premium, which entitles you to certain dental benefits. Benefits include checkups, cleanings, x-rays, and other dental services. There are plans that may cover dental implants, oral surgery and orthodontia, but they will be more expensive. Like health insurance, plans are categorized into indemnity and managed-care plans. If you choose an indemnity plan you will have a broader choice of dental care providers to choose from. You won’t have to choose one primary dentist and generally, you won’t need to acquire referrals. In order for the insurance company to cover your dental expenses you will need to send them a claim before they reimburse you for covered services. As a result, you will have to pay more out-of-pocket with an indemnity plan, but you will have more flexibility in choosing which dentists you visit. On the other hand, managed-care plans will provide you with a dental provider network and you will need to visit dentists within this network in order to get coverage for these services. With a dental care network, the insurance company has arranged pre-negotiated rates that you will receive when you visit these dentists. With a managed-care plan, the dentists will submit the claim for you, lowering your out-of-pocket expenses.

Save on Health Insurance

Health Savings Account

Health Savings Accounts (HSA) are tax-free savings accounts designed to help consumers pay for healthcare services while limiting premium expenses for unwanted benefits. The plans have lower premiums and higher deductibles than other insurance plans because they offer fewer benefits and require you to use the money in your HSA to pay for certain qualified medical services. However, if you don’t need to visit the doctor frequently and don’t anticipate requiring regular medical attention, HSA plans are a cost-effective method of insuring against the worst without paying for coverage you won’t use. In order to open an HSA, you’ll need to have an HSA-compatible health insurance plan. You may only use the funds in your HSA to pay for qualified medical expenses. Usually, your HSA plan will have a deductible that, once met, requires your insurance company to pay for any additional qualified medical expenses for the rest of the year.

Dental Insurance

Health insurance typically does not cover dental services, but in order to keep your teeth and gums healthy, you need regular visits to the dentist. Without dental insurance, regular dentist appointments can prohibitively expensive. Make sure your mouth is covered by shopping for both health and dental insurance. Dental insurance is similar to health insurance in that each month you pay a premium, which entitles you to certain dental benefits. Benefits include checkups, cleanings, x-rays, and other dental services. There are plans that may cover dental implants, oral surgery and orthodontia, but they will be more expensive. Like health insurance, plans are categorized into indemnity and managed-care plans. If you choose an indemnity plan you will have a broader choice of dental care providers to choose from. You won’t have to choose one primary dentist and generally, you won’t need to acquire referrals for special services. In order for the insurance company to cover your dental expenses you will need to send them a claim for reimbursement. You’ll end up paying more out-of-pocket with an indemnity plan, but you will have more flexibility in choosing which dentists you visit. By contrast, managed-care plans limit you to the doctors and services within a dental services network, and you will need to visit doctors within this network in order to get coverage for their services. Within the dental care network, your insurance company has arranged pre-negotiated rates that you will receive when you visit dentists in the network. Your dentist will submit your insurance claim for you, keeping your out-of-pocket expenses lower than with an indemnity plan.

Compare the Plans

Comparing insurance plans is an important step in buying health insurance. It will save you money in the long run if you take the time to compare premium prices, out-of-pocket costs, plan benefits, the network of physicians available with different plans, and the quality of insurance providers. If you have a favorite physician, make sure your health insurance covers visits to him or her. If you don’t need to see the doctor very often, don’t pay a high premium for low office visit copayments. Health insurance plans are designed to address specific healthcare needs, and you’ll save money and get the most effective coverage by comparing plans to find the health insurance plan that best fits your budget and lifestyle.

=

Health Insurance Help to Lower

Illness for non-work related injuries can be financially devastating. Insurance keeps you protected against disastrous health care expenses and lost wages. There are enormous health insurance plans available day-to-day, the insurance cost and its benefits vary from one plans to another. Before enrolling for a policy, an individual should consult with the insurance agencies, read the policy to get the complete information about the benefits and costs and also the way the plan works.

Today, there are many more kinds of health insurance to choose from than were available just a few years ago. Traditional differences between and among plans do not longer any more. Also, there is been an increased emphasis on the role of consumers in managing their own health care and health care finances. There is a focus on providing information on the cost of care and health care quality-at the level of the physician, physician group, and hospital-to help consumers and employers choose among the many options available to them. The things have changed a lot, when most people in the United States had health insurance has indemnity insurance (also called as fee-for-service or traditional insurance). This type of insurance coverage assumed that the medical provider i.e. doctor or physicians will be paid a fee for each service provided to the patient.

When we talk about health insurance, we usually mean the kind of insurance that pays medical bills, hospital bills, and typically, prescription drug costs. Nowadays, the insurance also covers Medicare and Mediaid that provides health insurance coverage for certain people, senior citizens, people with disabilities and also an individual and families with low income. Today, the online information helps an individual to compare two best insurance policies and choose best among it. The insurance help an individual for financial planning and accordingly choose the best suitable for the family. The policy helps to avoid the burden of expensive medical bills and ensure the penny paid in health plan is paid for your care. It protects you and your family financially in the event of an unexpected serious illness or injury that could be very expensive.

In spite of available health insurance help online, unfortunately many Americans are still uninsured or underinsured. Some may be eligible for private or government but may have difficulty in finding the maze of complex rules and insurance jargons. Many more may not even have chosen the plans due to non-affordability coverage or may not be eligible for any. To help you choose right plan, we give you an overview of programs and strategies for seeking free or reduced-cost health care and managing medical debts.

Why does an individual require health insurance?

As the science and medical care advances, the ways of treatment are also increasing simultaneously. The main purpose of health insurance is to help in paying for care. It protects you and your family members in an unexpected serious illness and injury that may be high in cost. Additionally, you are more likely to get regular and routine checkups, if you have an insurance policy. Every individual requires insurance policy because you cannot predict your illness, injury and your high paying medical bills. One must seriously consider the need for health insurance for own and family. We also know that there is interlinking between having health insurance and getting protective health care. The research states that people having health insurance are more likely to have a regular doctor and get care when it is needed.

How should one get health insurance?

Most of the people get health insurance through their employers or company which they belong to. This is formerly known as group insurance. Some individuals don’t have access to group insurance. In this case, one may choose to purchase their own individual health insurance directly from public or privately owned insurance company. Most of the Americans in North America get health insurance through government programs that operate at National, State & Local Levels. Insurance- whether provided by your employer or purchased by you – can be both expensive and complex. To understand better option, you must take health insurance help from the experts and advisors.

Group Insurance:
Group Insurance is basically offered by the employers or else by an organization of which you are a member of union, professional association wherein you may get group coverage. The employee has to choose between several plans been offered by an employer’s including both indemnity insurance and managed care. Some employer may only offer one single plan. Some group plans may also include dental care with the health and medical benefits. Hence, it is a very important decision to be taken by and employee before choosing any insurance benefits offered by employer or an organization. It is also essential to compare plans to find the one that offers the benefits as per your need. Once you choose an insurance plan, you usually cannot switch over to another plan until next open season, usually set once a year.

In group health insurance, employer usually pays portion or all of the premiums. This means your costs for health insurance premiums will be lower than they would be if you paid the entire premium alone.

If you are a member of group insurance offered by an organization, you are benefited from being a member of a large group. You will have to pay lesser premium than an individual would be paying. However, the organization often does not pay a share of premium, meaning you are responsible to pay complete premium by yourself.

Individual Insurance:
In an individual Insurance, you get the coverage directly from the Insurance Company. You don’t have any access to the group insurance offered by an employer or an organization. When you buy you own insurance, you have to pay entire premium rather than sharing with an employer according to Group Insurance. In individual insurance, you do not share any cost of premium with your employer. You should analyze and choose an individual insurance plan that fits your needs at a price that you are willing to pay; you should also consult a tax advisor to find out whether you are eligible for any tax deduction as per the insurance plan.

Insurance variably differs from one company to another within an insurance industry, from one plan to another and one product to another. Hence, choosing right company, right product, right plan are the important criteria before choosing any plans.

Which type of health insurance is right for you?

Whether you choose group insurance or an individual insurance plan, you must carefully compare coverage and costs. You should compare the following important aspects like coverage and benefits, premiums, exclusions and limitations, access to hospitals, doctors, and other providers etc…

Group Health Insurance

The health insurance marketplace is certainly challenging, but count your lucky stars that at least you have choices. To that end, this article is going to explore the pros and cons of group health insurance.

Group Health Insurance Pros

  • Group health premiums are subsidized by the employer. Generally, an employer must contribute at least 50% of the “employee only” premium. As such, if you are the employee, you can likely get a richer health plan for less premium than you would pay in the individual health marketplace. However, the cost to add your dependents to the employer’s plan, may be cost prohibitive. In this case, and assuming that your dependents can qualify, then you may want to put them on an individual health plan.
  • Group health premiums for large families are the same as for small families; whereas in the individual market, you pay a separate premium for every family member. So, if you have a large family, you may be able to get a better deal by adding them to your employer’s plan. As with any insurance change though, don’t make any changes without consulting with an experienced insurance advisor in your state.
  • Group health insurance in most states is guaranteed issue – meaning that you can’t be turned down because of pre-existing health conditions. This is a real blessing if you or a family member has a medical condition that prevents you from qualifying for a individual plan. But, this is a double-edged sword. While being guaranteed issue is a huge benefit for those with pre-existing medical conditions, it does come at a price. This one feature alone accounts for most of the disparity between group and individual insurance premiums. Yes, that is right – in most states, individual health premiums are almost always less expensive than group health premiums.
  • Most group plans cover maternity. So, if you are planning on having more children, you should definitely consider hopping on to a group plan. While you can add a “maternity rider” to individual plans, these riders tend to be expensive, restrictive, and otherwise provide less value than the coverage you can get in a group health plan. That being said, if you are considering having more children, we recommend that you contact a health insurance advisor in your state for advice about what is best for your family. The right answer is different for each unique family.
  • Economies of scale can benefit employees of large employers. It is true that the larger the group, the larger the risk pool is in which to share the risk which CAN result in lower premiums than are available in the individual health market. However, the guaranteed issue “issue” CAN wreak havoc on this type of plan. For example, a large employer with good benefits tends to retain employees for long periods of time. Eventually, the average age of the group starts to creep up and so do premiums. In addition, people with large medical needs (expensive medical conditions) tend to be attracted to large plans because they are guaranteed issue with good coverage. And so, over time, not only is the group’s average age increasing, but the group is also attracting employees with large expected health costs. This is the dilemma that we see with large health plans like the U.S. auto-makers and even government plans. Eventually, those with lots of medical needs begin to outnumber those with little or no needs and so premiums are driven higher and higher.

Group Health Insurance Cons

  • Group health insurance can be more expensive than individual health insurance. ln fact, if you don’t factor in the employer’s contribution towards premiums, then individual plans are almost always more affordable than group plans. However, as we discussed earlier, not every one can qualify for an individual plan.
  • What happens if your employment is terminated (by you or your employer)? Yes, you will likely have some benefit continuation rights (through COBRA or state continuation programs), but these benefits can be very expensive and the term limited. So, eventually, you either have to secure another job with benefits, an individual health plan (assuming you are insurable), or possibly join a government health insurance program for the uninsured (if you are not insurable). Let me emphasize, that you should NEVER be without some form of major medical health insurance. Being without this insurance puts you and your family in serious financial jeopardy. In fact, a recent Harvard University study found that 50 percent of all bankruptcy filings were partly the result of medical expenses.¹ To the same point, every 30 seconds in the United States, someone files for bankruptcy in the aftermath of a serious health problem. Don’t let this happen to you.
  • Group health insurance premiums are rising faster than individual health insurance premiums. Why? Because most group plans are guaranteed issue and since they accept “all comers”, they tend to attract those with high medical costs. On the other hand, most individual health insurance plans are medically underwritten. This means that the insurance company can say “no thanks” to any application that it deems to not be in its interest. Put yourself in their shoes – would sign a contract to provide $30,000 in annual benefits to someone that was only going to pay $3,000 in premiums (for a net loss of $27,000) if you didn’t have to? Hmm…let me me think about that one. The answer is a resounding “NO!”. Because of this underwriting process for individual health insurance, insurance companies can control their risk and more effectively manage their profitability, resulting in more stable prices.

As you can see, there is no clear cut answer as to which type of insurance is the best. The answer depends on a number of factors and is different for every unique situation. The best advice I can give you as you consider your health insurance options — get good advice from an experienced health insurance advisor.