Group Health
Question
Group health insurance more expensive than individual?
On Aetna's HDHP 3000 plan, I was quoted $120/month online for individual coverage, whereas our HR firm quoted $279/month for Aetna's HDHP 3000 in group coverage. I've always heard that group coverage is cheaper than individual. What's going on here?
5 months ago - 4 answers
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You can easily check your minimal health care rates in internet, for example here - healthplans.my-age.net
by dan
5 months ago
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Other Answers
Group coverage is almost always more expensive than individual insurance because of the mandated coverage that most people don't use and because they must cover everyone in the company no matter their health or age. The main reason most people think that it is cheaper is because the employer will usually pick up a good percentage of the charge.
by Zarnev- 5 months ago
Group is always more expensive, because it provides better coverage. You get what you pay for. Watch out for individual plans with lifetime maximums of $125,000. Once you hit that lifetime maximum, your individual policy covers nothing more for the rest of your life. Also, the circumstances causing you to reach that level will likely make you uninsurable.
by zeuz- 5 months ago
Zarnev is correct in his statement that group coverage is tradtionally more expensive because they are required to cover everyone in the group. Young or old, healthy or sick. This aggregation will cause the cost (compared with individual coverage) to be higher in most cases. The individual plan requires you to go through underwriting and they can put a rider (exclusion) on certain conditions or decline to cover you at all. Your employer is also required to pay a percentage of your premium. The minimum, in most states, is 50% of the employee only cost of insurance. Many employers are not contributing towards dependents coverage and therefore the cost can escalate. A good strategy for them is to cover the dependents on individual plans and let the employee take advantage of the employer contribution to help offset the cost. Zuez was partially correct that the coverages can be different. You can see the lifetime benefits be different ($125,000 vs. $5.0 million) but many individual plans have comparable lifetime amounts. The biggest difference I have seen in individual vs group plans is the amount individual plans will pay in a year for prescriptions. Many plans have a $5000 annual maximum payouts for them. Maternity is also not covered by many individual plans In regards to your coverage. If you are healthy, I would take the individual plan. Your plan is a qualfied High Deductible plan that will allow you to contribute to a Health Savings Account. I would put the amount you would have normally paid for coverage in the HSA account and now you have funded it with $1800 tax free dollars. Your health insurance premium on an individual plan will be after tax, but you will save on the other contribution and can use those dollars to pay for services. Hopefully, this helps.
by Michael- 5 months ago
Good question and a common misconception. For most people, individual health insurance is less expensive than group plans. There are a variety of reasons for this, with a few "biggies" that stick out: 1. Group health plans have to, generally, take everyone who is eligible for coverage, often regardless of health. Individual plans are allowed to accept you, turn you down, or offer you the "yes, but..." plan ("we'll take you, but we want a waiting period before we cover your pre-existing health condition," etc., etc.). Because of this "extra" flexibility the individual plans have (they don't have to take everybody) they're usually able to lower the price compared to a group plan. 2. Group plans are subject to more "micro-managing" by our government in the form of "mandated" benefits (for example, they often MUST cover maternity benefits, mental illness, chiropractic care, autism treatments, eating disorders, and so forth). This is not to say that these "required" benefits should or should not be covered, but when the government requires a group plan to do so it raises the price. (State & federal legislators often pass the regulations to appease special interest groups and then, when the health plan prices go up to reflect the required increase in benefits, the public gets mad at the insurance company for raising prices instead of the legislators for requiring it <sigh>.... oh, well.) Anyway, more regulations & requirements mean higher prices. Individual health plans are often not required to have all this. 3. Most group plan require maternity coverage (an employer is prohibited in most states to "discriminate" against the female employees regarding maternity; therefore, it's required). Most individual plan don't offer maternity at all or, if they do, they have seriously curtailed benefits and/or long waiting periods before benefits would start. Need individual quotes to compare with a group plan? 1. Go to www.nahu.org & find a local broker (this is the professional association for agents like me who specialize in health insurance, both group and individual). 2. Go to www.genesis-grp.com (my site) and run your own set of plans and prices. 3. Do an online search for "health insurance quotes AND <your state>" and get some quotes. Hope this helps a bit... have a nice evening!
by Arthur- 5 months ago