Cheap health insurance — group or individual plans?

As the names suggest, an individual plan is a policy you buy from a private health insurance company, whereas a group plan is one you access because you belong to a group of people. The most common form of group plan is offered by employers. As the US fell into a recession, business at all levels found the going tough. Now, even though there is a tax credit to encourage small businesses to continue and, in some cases, expand health coverage, most employers have been asking their employees to pay more. Even so, these employment-based plans tend to be cheap health insurance as the risks are spread out among quite large groups of people. You will also find other groups running health plans. Colleges and universities, trade and professional associations, the AARP and so on, all offer health plans if you meet the eligibility criteria.

The majority of group health plans are similar in their coverage, although some offer a choice of plan and so a decision on the health insurance rate you prefer to pay. The first choice is usually whether you want dental coverage, and then you get into the issue of whether the plan is solely for the employee or includes the family as well. If a family plan is on offer, this is usually cheap health insurance for all. Look at the small print to see what is covered. Equally importantly, look at whether the children can leave and then rejoin. For example, your children may get good health cover at college, but they are also entitled to remain on the parents’ plan until they are 26. So can your children move to a college plan and then revert to the employer plan until they are 26? You also need to look carefully at what happens if the spouses have separate jobs, each offering a health plan for the family.

If you are not employed or your employer does not offer a health plan, your only option is individual health insurance. This is always more expensive so, if your health has been consistently good, the only way of getting cheap health insurance is to agree a high deductible or limit the coverage — this means looking at the risks and deciding which will not apply to you. Men may opt out of maternity coverage, for example.