Group vs. Individual Health Insurance: Which is Right for You?
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Introduction
Let’s say you’re a college student and your school offers a group health insurance plan. Or let’s say you work at an office that provides medical coverage to its employees. You might wonder: Is it better to go with a group health plan or stick with individual coverage? The answer is not always simple, but there are some factors to consider when deciding between the two types of coverage plans.
Group health insurance plans give employees the same coverage that other employees have.
Group health insurance plans are more expensive than individual plans because the pool of people is larger. This means that there are more people paying into the plan and therefore, the cost is spread out among all of them.
Group health insurance plans are also more expensive because they offer better coverage and benefits than other types of policies do.
You can get a better deal on group health insurance than on individual health insurance.
Group health insurance is more affordable than individual health insurance, because it’s a bulk purchase. When you buy a group plan, you are buying the same coverage as everyone else in your group–and that means that the average cost of each person’s policy will be lower than if they were to buy it on their own.
Additionally, if one member of your family has an expensive medical issue (like cancer), that won’t affect everyone else’s premiums at all!
If you have a preexisting condition, individual health insurance might be the way to go.
Preexisting conditions aren’t covered by group health insurance. If you have one, it’s likely that your premium will be higher or that the plan won’t even cover your condition at all. But with individual health insurance, there are no restrictions on who can get coverage and what they can buy–and this means people with preexisting conditions don’t have to worry about being denied coverage or having their premiums go up because of their medical histories. However (and this is an important however), there may be extra costs associated with getting individual coverage if you have one or more preexisting conditions–but those extra costs shouldn’t be too high compared with just paying for COBRA after leaving an employer-sponsored plan due to termination or retirement (which would also include paying out-of-pocket expenses).
Some people who work at companies that provide health benefits may not need individual coverage.
However, if you are self-employed or changing jobs, getting individual health insurance may be a smart choice.
In between jobs? If your last employer provided health benefits and they were terminated before the end of the year (December 31), then COBRA continuation coverage can be extended until April 30 of the following year. If you don’t sign up for COBRA within 60 days after losing your job or retiree coverage, then there is no other option available to maintain your previous level of benefits unless someone else in your household has access to another source that provides similar coverage–such as through their own job or spouse/partner’s employment.
When it comes to medical coverage, the answer isn’t always simple.
For example: You may be able to get great individual health insurance at a low price if you are young and healthy. However, if you have a pre-existing condition or other risk factors (like being pregnant), your premiums could be much higher. In this case, group plans might work better for you because they’re designed to cover people with higher risks without charging them more money than others in their age bracket who don’t have those risks.
Or consider another scenario: Say your company offers really good group rates but requires employees who opt into them to pay an employee contribution toward their monthly premium costs–a practice known as “cost sharing.” If this amount is too high for your budget and prevents you from accessing needed care when needed (or makes getting better preventive care difficult), then buying individual coverage may be better suited for meeting those needs while saving money on premiums overall.
Conclusion
If you have a preexisting condition, individual health insurance might be the way to go. If you work at a company that provides health benefits and don’t need individual coverage, though, group plans may be your best bet.