How to Choose Between Group and Individual Health Insurance

There are different types of health insurance, but the primary purpose of all insurance plans is to cover the costs associated with receiving care for an injury or illness. This includes surgical procedures, medications and other costs associated with health and wellness. There are several considerations when choosing between a group and individual health insurance policy since there are many differences. Below you’ll find tips that can help you choose between the two types of health insurance policies.

Understanding Group and Individual Health Insurance

Employers provide their employees with group health insurance, which often includes the employee’s eligible dependents. Selection of the group health plan is done by the employer. In most cases, there are a few options of group plans provided from which the employee can choose, but the employer covers the cost of the premium. As the cost of healthcare has increased over the years, employers have required employees to share that cost.

Individual insurance is different because it’s purchased by the individual and there is no employer involvement. Individual insurance can cover both the individual and their family members, including a spouse and children. Given the complexities of health insurance plans, agents often provide the guidance needed to help people understand the different options and choose what works best for them.

Differences in Cost

Just like any other product or service, group health insurance is cheaper because it’s purchased in bulk. In fact, the discounts are significant and can make it much more affordable. The price for group health insurance versus individual health insurance can be stark because of group discounts. When it comes to individual health insurance, there is no incentive for insurance companies to provide a discount. Fortunately, there are more options form which to choose when considering an individual health insurance plan. This enables anyone on a budget to find more affordable options.

Generally speaking, there is no reason for a person not to choose group health insurance if it’s offered and paid for by their employer, especially given the lower price. There are some instances in which the limited options provided by an employer causes an employee to look elsewhere for individual health insurance that meets their individual needs or the needs of their family members. While this is rare, it’s sometimes necessary. Fortunately, there are some affordable options from which to choose, but it takes time and research to find lower priced plans.

Choosing between group and individual health insurance isn’t easy for most people because they will automatically select the policy paid for by their employer. However, individual health insurance is a viable alternative. For many people that are self-employed, an individual plan is their only option.