3 Main Types Of Health Insurance: The Benefits

The Good, the Bad and the Ugly: Group vs. State vs. Individual Health insurance coverage

Compare the three main types of health insurance by cost, coverage and accessibility

By Meha Ahmad, Insuranceagents.com Staff Writer

The health insurance market can be a mystery, causing many people to agonize over the same questions: Is it available? What kind should I get? Which type of health insurance is the most affordable? To start shopping for quotes now use our quick online form to compare rates. The best place to start is in the beginning, by comparing the two main types of health insurance: Individual policies and group policies.

Individual health insurance policy: What is it about?

This kind of health insurance policy covers you (the policyholder), your spouse and your dependents. Generally, an individual health insurance policy is more costly than a group health insurance policy, since the policyholder is responsible for all premium payments. Here are just a few benefits to having an individual health insurance policy:

• Can be used to claim tax benefits
• More personalized health insurance policy, catering to your lifestyle
• You keep your individual health insurance policy for as long as you pay your premiums; with a group health insurance policy, you run the risk of your employer changing the amount you pay toward the premium, the plan itself or even the existence of the plan (your employer does have the right to cancel it). With an individual health insurance policy, you have more control.

There are a variety of individual health insurance policies available, including HMOs and PPOs.

Group health insurance: What is it about?

The most preferred type of health insurance is typically group health insurance. Most commonly this means employer-sponsored group health insurance. Through a person’s job, he or she can receive health benefits for themselves as well as their entire family. Here are three benefits to a group health insurance policy: 

• Usually more affordable than an individual health insurance policy, because employers pay a portion of the premium
• Provides more kinds of medical services and coverage
• Can’t exclude beneficiaries based on age or preexisting condition(s)

Keep in mind, there are other kinds of group health insurance than just the employer-sponsored kind. If you are self-employed and head your own company, you can look into purchasing a group policy for your employees; there is also association-sponsored group health insurance coverage (for example, receiving health benefits as a member of a union).

State-sponsored health insurance: What is it about?

Most valuable to low-income families, the unemployed, employees who don’t benefit from a group plan and senior citizens, state-sponsored health insurance programs include Medicare and Medicaid. These programs cater to limited-income individuals and families. Requirements vary from state to state. Here are a few benefits of government-sponsored health insurance:

• Usually the cheapest option; can be very cheap or free
• Doesn’t deny coverage based on pre-existing conditions
• Reduces your out-of-pocket costs over time

No health insurance policy option is a one-size-fits-all deal, so be sure you know what each kind of policy offers. Most importantly, know what coverage you and your family need to maintain your health. That will help you determine whether an individual, group or state-sponsored health insurance policy is best for you. Get the lowest rates on a new policy using our online quote forms to compare up to five offers.

Published: Tuesday 8th September 2009