You’ve had Group Health Insurance from your employer for years. You pay your portion of the health insurance premiums and enjoyed incredible benefits like low Dr. Visit co-pays and small deductibles. Even child birth and pre-existing conditions are covered.
Then things change and you suddenly find yourself in the market for Individual Health Insurance and quickly realize things aren’t the same. And while there are many differences, two stand out almost immediately:
- Compared to the cost of COBRA, premiums are much lower
- Compared to the benefits you once had, Individual Health Insurance seems to offer less
But fear not! When expectations are set correctly, Individual Health Insurance will almost certainly prove to be a valuable investment.
Here’s what you need to know when making the change:
The good:
- The overall cost of your Individual Health Insurance plan will most likely be lower than the cost of Group Health Insurance.
- There are many flexible options, including tax advantaged HSA qualified plans
- If you’ve exhausted all other forms of coverage, including COBRA, you are guaranteed coverage under HIPAA (Health Insurance Portability and Accountability Act)
- You must medically qualify.
- Your pre-existing conditions will most likely not be covered immediately (There are a few exceptions to this)
- Your deductible and co-pays on an individual health insurance plan will almost certainly be higher compared to a group health insurance plan
- The list of exclusions is greater. (Benefits for Pregnancy, Mental Health and more are much more restrictive)
All that said, Individual Health Insurance still plays a very valuable part in one’s strategy to protect themselves from catastrophic medical expenses. In many ways, Individual Health Insurance works like auto insurance.
Put quite simply, Individual Health Insurance is priced and designed to only cover the unforeseen, whereas Group Health Insurance is priced and designed to cover the unforeseen plus the things that have already happened.