What are the main differences between individual and group health insurance policies?
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Asked February 23, 2012
There are a number of differences between individual and group health insurance, and each one could be considered the primary concern, depending on your personal circumstances. The actual coverage will not vary much from type to another, but the premiums, out of pocket costs, and qualifying conditions are substantially different.
Most group health plans do not require any type of medical examination, where individual coverage almost always does. This is because group coverages are designed to meet the needs of large numbers of people who have many different health concerns, relying on the number of participants to offset the higher costs of a small percentage of members. With individual, or private, insurance, you have to take a medical exam and may not qualify for private coverage at all if you have any preexisting conditions, including such common conditions as asthma and diabetes.
Group health insurance is generally much less expensive than individual coverage. As with medical qualification, the insurance company relies on a large number of participants, some of whom require more3 care than others, to balance out the cost of the program. In individual insurance, your premiums must be sufficient to offset the costs of any care you receive without the benefit of other members. Similarly, you may be expected to pay a higher portion of the costs out of pocket with private insurance, in the form of copays and other fees.
One of the benefits of individual insurance is that most plans will allow you to choose your own doctors, where group plans may require you to choose from caregivers within a select network of physicians. Even when group plans do allow you to go outside the network for care, you will have to pay the difference between the cost of network care and the out-of-network caregiver.
Answered February 23, 2012 by Anonymous