Pros and Cons of Group Health Insurance Author:    Posted under: Health InsuranceHealth Insurance questions answered


Group health insurance provides health care coverage for a group of people. Here, people enroll in a group plan to get health insurance coverage instead of an individual insurance plan. This is often linked to insurance given by employment to a company or a small business establishment but it is not limited to employers only. Associations, groups, clubs and organizations and such may also offer group health care for their members.

PROS:

  • Insurance premiums are often covered partly or completely by employers.
  • Group plans are cheaper than individual plans. Insurance companies get more profit when they have more people on their plans.
  • Group insurance policies cover all people, regardless of age or present state of health.
  • Physical exams and medical history surveys need not be given or completed since an insurance company gives all employees under a group health insurance.
  • It is the best possible and cheapest health coverage for employees.
  • People who have been turned down for individual health plans and policies are eligible for group insurance plans. Insurance in most states is guaranteed issue. Members cannot be rejected or turned down because of pre-existing health conditions.
  • For instances when families enroll in a group health plan, premiums for large families are the same as for small families.
  • Most group health plans also cover maternity. For people who are planning on having more children, group health plans should definitely be considered.
  • Even if you get terminated, state continuation programs or COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985) enable you to continue receiving insurance.

CONS:

  • It is designed for a whole group, therefore it cannot be tailor made for a particular individual.
  • A person in a group insurance plan cannot decide what type of policy, amount of premium and deductible and maximum lifetime coverage it provides.
  • When the member leaves the group or company it belongs to, the member may lose the group coverage. In some cases, it is possible to keep the policy but the person will have to pay the premiums himself.
  • Although the COBRA allows members to continue to enjoy insurance services, they can be very expensive and limited. They only last as long as 18 months to 3 years.
  • It is found that premiums of group health insurance plans are rising faster than the premiums of individual health insurance plans. Since all kinds of people (disregarding age and state of health) are eligible for group insurance plans, they tend to attract those with high medical costs or high risks.

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