I work for a very small company – 10 people. So, I’m on my own for buying health insurance. I hear a lot of talk about “group” and “individual” plans. I’m not sure which one I need. And what’s the difference between them anyway?
Generally, group plans pay for more medical services and have lower co-pays and deductibles than individual plans. Group plans also are more likely to cover mental health services; individual plans may offer mental health services as a separate “rider” with a separate additional fee. Group plans tend to be cheaper too.
The insurer can set a price for group plans, knowing that the plan will get some healthy people and some sick people. The price for individual health plans is higher because people who are buying their own plan are more likely to need medical services; there is not a mix of healthy and sick people buying individual plans, in other words.
This will change when everyone is required to have health insurance in 2014. Then, insurers will have more healthy people buying individual plans. In the meantime, unless you are a business owner, you will have to buy an individual plan.