At present many people out there are opting to switch from a group health insurance plan to an individual health insurance plan. Well taking both of these coverage plans into account, it is more than necessary to mention that there are a lot of significant differences that exist between these two types of insurances and also in the way both of these cost. This article will help you gain an idea of the basic differences between the individual health insurance plans and the group health insurance plans. An idea of this distinction will make it easier for you to decide which one would be more suitable for you.
To start off, it is Group Health Insurance we will be talking about. This insurance coverage is supposed to be purchased by the employer or a business owner from a company that sells health insurance plans. All the employees who are responsible are entitled to receive the coverage as a part of the plan. The greatest advantage with these insurance plans is that these are a lot more affordable and cost effective. And that is precisely so as when buying these the small business owner enjoys the buying power of the entire group. Moreover, the insurer bases all the premium rates calculating the entire insurance amount that the whole group will use as a collective.
Nonetheless, when one buys an individual health insurance plan the premium is calculated not on the basis of a group but based on the individual alone. That is the simple secret to the individual health care insurance plans being so much more expensive. The individual health insurance plans are bought directly from the company and not through any employer. In this case it is the sole responsibility of the individual buying the insurance to choose upon the coverage that he will like to purchase either for himself or his entire family. Often the individual health care insurance plans also do not cover the expenses of the substance abuse treatments within the coverage.
Yet another viable difference between the individual health care plans and the group health care plans is that with the latter it is a legal binding on the insurance company to provide coverage for each and every individual who works for the employer who buys the plan. However, with the former the companies are not bound to provide the clients with a policy. This is a fact that can be very alarming for people who already have a few existing coverages. For instance, in case you suddenly lose your job you will realize that though you still are covered by the group health care plan yet it is becoming almost impossible for you to find an individual plan that would back you up. Hence the assurance factor is not that solid.
In some US states, the insurance companies are eligible to issue policies to all those individuals who already have a pre-existing plan. But these policies are issued only under circumstances of an exclusive provision. What that indicates is that no service will be provided for any of the pre-existing conditions.
