Advantages and Disadvantages of Individual and Group Health Insurance

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Article Title:

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Advantages and Disadvantages of Individual and Group Health Insurance

Article Description:

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The cost of individual and group health insurance coverage varies

greatly as does the type of coverage they both offer. Making the

switch can bring some surprises.

Additional Article Information:

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639 Words; formatted to 65 Characters per Line

Distribution Date and Time: 2009-04-01 12:00:00

Written By: Kielty

Copyright: 2009

Contact Email: mailto:vck@...

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Advantages and Disadvantages of Individual and Group Health Insurance

Copyright © 2009 Kielty

North Carolina Insurance

http://www.ncinsuranceplan.com

Switching from group to individual health insurance is a change

many people are currently facing. There can be some big

differences between the two types of insurance and their cost.

Becoming familiar with some of those basic differences will help

you to know what to expect.

Group Health Insurance

Group health insurance is purchased by your employer from a

health insurance company. Everyone who is eligible can receive

coverage under the plan. Group health insurance is less costly

than individual health insurance, because you have the buying

power of the group. The insurance company bases the premium upon

a calculation of how much insurance the group as a whole will

use. However, if you are buying individual health insurance, the

calculation of your premium is not based on a group, it's based

on you alone. That is why individual health insurance can be so

expensive.

Individual Health Insurance

Individual health insurance is health insurance that you purchase

from an insurance company on your own, and not through an

employer. You can choose coverage for either yourself or your

self and your family, individual policies often provide less

coverage than group policies do. Under an individual plan, some

services such as substance abuse treatment may not be covered.

Another important difference between group and individual health

insurance is that with group insurance, the law requires the

insurance company to cover everyone who works for that employer.

With individual health insurance, companies are not required to

issue you a policy. This can be very alarming for people who have

pre-existing conditions. If you have recently lost your job, it

can be surprising to find out that even though you have been

covered under a group plan, there is no assurance that you will

be able to obtain individual health insurance coverage.

In some states, health insurance companies are allowed to issue

policies to people with pre-existing conditions, but they are

issued with an exclusionary rider. That means that any services

for the pre-existing condition are not covered. Each state has

its own laws overseeing how individual health insurance is

administered. Therefore, plans can very a great deal from state

to state. Plans can also vary from one insurance company to

another. Be sure to check around and compare quotes and plans

from several different companies before making a decision.

COBRA As An Option

One of the first options presented to people who have lost their

health insurance coverage is COBRA. COBRA stands for the

Consolidated Omnibus Budget Reconciliation Act and it allows you

to continue on your employer's health insurance plan for up to

18 months after losing your job. However, there are several

situations in which employees would not be eligible for COBRA

coverage such as, if the company employed less than 20 people and

went out of business, or if it dropped its group health insurance

or went into bankruptcy.

One of the drawbacks of COBRA is the expense. Under COBRA you

have to pay the entire amount of your health insurance coverage.

Whereas when you were employed, your employer paid a portion of

your benefits. One recent development that will be beneficial to

COBRA recipients is that after March 1, 2009 recipients will only

have to pay 35% of the cost of the monthly premium and the

federal government will pay the remainder for up to nine months.

If you have recently lost your group health insurance, switching

to individual health insurance will cause the cost of your health

insurance to increase. Understanding the different types of

insurance and how they work, will help you to prepare. If you

have pre-existing conditions and are concerned about finding

individual health insurance coverage, investigate COBRA and find

out if it is an option. Also, check with several different health

insurance companies and compare the costs before you make a

decision.

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Kielty lives in North Carolina and writes articles

on health insurance. If you are looking for rate quotes

on health insurance in North Carolina, visit BCBSNC, also

known as Blue Cross and Blue Shield of North Carolina

http://www.ncinsuranceplan.com