Individual Health Insurance Versus Group Health Insurance
Many people stick with their employer sponsored health insurance plans because they do not know the benefits of individual health insurance or know that they can purchase a separate policy.
You may be wondering what type of insurance is best for you: insurance through your workplace, or individual health insurance through a private company.
Group Health Insurance
Employer sponsored health insurance is paid for by businesses as part of an employee benefit package. Many employers offer this these days, as most employees expect it as part of their routine benefits.
The majority of larger businesses in the United States now offer insurance to their workers. In most cases, the employer pays about 85 percent of the insurance premiums for their employees. If there are dependents on the employer sponsored, the average the employer pays is around 75 percent. The employee will then pay the remaining premium, usually with their before-tax earnings. It is usually taken out of the employees’ paycheck.
Great deals of people who participate in employer based insurance plans are enrolled in PPOs, which use a network of doctors that is already in place to provide care. In some cases, PPO plans will allow for the patient to go outside of the network, but in this case, the patient may have more of a copayment.
A smaller percentage of employer based plans do include the use of HMOs, which are health maintenance organizations that exclusively operate with the use of a network. The patient may not go outside of this network and expect coverage.
In the case of employer based plans, the patient has little choice as far as what type of insurance is chosen. This affects what doctors, hospitals or level of care they receive; and in many cases, they must go through a pre-approved network. Many employees do not mind these regulations as their overall premiums are cheaper.
Individual Health Insurance Policies
Individual health insurance plans work somewhat differently. People can choose from a plethora of different, private companies to customize their health insurance plans to suit their needs.
In an individual health insurance policy, you can choose which type of health insurance plan you may desire. Types included are HMOs, PPOs with Health Savings Accounts, Fee for Service plans, as well as several other types of health insurance policies. It is the patient’s choice which plan they wish to purchase, as some require a pre-approved network of doctors and providers (HMOs) and others allow you to use whomever you wish (some PPOs and Fee for Service).
Individuals can also find plans based on premiums, deductibles, copayments and co-insurance rates. This allows them the find the perfect plan for their budget while getting the coverage they need.
The types of insurance are much the same as with employer-based insurance. If you choose an HMO for your private insurance, you must stick with the network of doctors and providers that is allocated to you. With PPOs or Fee for Service, you may be able to go outside of the network in some instances, provided you can pay the added co-pays or premiums.
People can save money with individual health insurance plans and find affordable coverage. Many people who end up shopping around for insurance can find a plan that fits their health care needs.