Insurance companies offer plans that cover medical costs in exchange for payment of a monthly premium, also known as health insurance. Group and individual health insurance plans offer several types of coverage, but vary in their cost, availability and coverage for chronic or pre-existing conditions. Learn about the types of health insurance available to you before contacting an agent for a quote.
Definitions
Group health insurance provides health coverage for two or more employees of a company. Employers offer these plans to employees as a part of their overall employee benefits package. Individual health insurance plans are for self-employed or unemployed people, who do not qualify for group health insurance coverage from an employer.
Types
HMO plans have no deductible and often have low co-payments for doctor visits and other services. These plans consist of a network of medical providers, which you must use in order to receive coverage for your medical expenses. PPO plans have networks similar to those of an HMO, but allow covered employees to seek care outside of the network. Members of POS plans choose a primary care provider and must receive referrals to see medical specialists. If you use an out-of-network provider, you may have to pay a higher deductible or co-payment. High-deductible health plans, also known as catastrophic health plans, only pay for services after you meet the high deductible. Individuals can also purchase coverage through an HMO or PPO. Fee-for-service plans cover your medical expenses, but require you to pay the expenses up front and submit forms for reimbursement.
Benefits
Group health insurance plans cover high-risk individuals that individual health insurance plans do not cover. If an employer chooses to pay some of the health insurance premium for an employee, group health insurance may cost less than individual health insurance. Individual health insurance is ideal for people whose employers do not offer health insurance, those who are unemployed and those who are self-employed. Inexpensive individual plans may reduce the expense of carrying health insurance for some individuals.
Disadvantages
Group health insurance plans may not offer comprehensive coverage for surgery, pregnancy care, anesthesia services or mental health care. An employer may choose the least expensive plan available, giving employees little control over covered services, deductibles and co-payments. If an employer does not pay some of the monthly premium, group health insurance plans may exceed the cost of individual health insurance plans. Individual health insurance plans may not cover those with pre-existing medical conditions. If someone with a pre-existing medical condition buys an individual health insurance plan, the monthly premium may be very costly. Some insurance companies require a medical exam before an individual insurance policy is issued.
Considerations
Consider price, availability and quality of coverage when selecting a group or individual health insurance plan. If you are selecting a group plan through your employer, discuss your options with your plan administrator or a human resources representative. You may have access to plan documentation, brochures and other resources that can help you make a good decision. Contact an insurance broker or agent to discuss your options for individual health insurance coverage.
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