Individual Health Insurance vs. Group Health Insurance
By Joel Ohman
Individual health is very different from group health in some respects. Many people have had group health from a large corporate group plan and that is all that they have ever known. Many have never had to actually pick and choose between different companies and different health plans as all of the decision making was done on their behalf by their employer. Here are a few quick things to keep in minding when searching for individual health insurance.


The underwriting for individual health is different than the underwriting for group health insurance.

This is great news if you, your spouse and kids are healthy as individual health rates are much cheaper than a comparable group health plan. It could be a cause for concern if you have some health issues in your past as there is the possibility that the application will be declined due to what is called “pre-existing conditions” in your medical history. Most individual health companies will look back into your health history going back about 10 years. If the application is on a fully underwritten basis and there are major health issues such as cancer, diabetes, heart disease, etc. then the application will be declined. (What do you do at this point? Make sure that you keep your current coverage and elect COBRA benefits or any other form of continuation coverage and when that coverage expires



you will want to look for a HIPAA eligible health plan).

Individual health is much cheaper than group health insurance.

Think of it kind of like; in individual health the company gets to pick and choose who they will extend coverage too. They choose those who are healthy and have the lowest risk to the company. Therefore, the rates are much lower than in a group health plan where no matter who applies for coverage, whether healthy or unhealthy, they are offered coverage (and of course everyone that is unhealthy wants health – this principle is called the law of adverse selection if any super technical people just love knowing the actual name of principles). A good way to think about it is if you are healthy and on a group health plan then you are in a sense subsidizing the cost of all of the unhealthy people on the group health plan.

Getting quotes for individual health is very easy.

Obtaining group health quotes is sometimes a long drawn out process of filling out a census form with all of the employee information and other administrative time consuming tasks. With the ease of the Internet and the simplicity of individual health rates all it takes is a few moments to enter in basic health information and you can view individual health rate quotes online.
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Take a few moments to learn about the different health insurance plan options in your area so that you can be better equipped to find the most appropriate health care coverage for you and your family!

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