Individual Health Insurance vs Group Health Insurance in Today's Market
July 2010
Though months have passed since it became law, the public is still deeply divided about the
healthcare bill, with 33% of Americans fearing that the bill will have a negative impact on their medical coverage.
In part this divide is based on the vast difference between the
individual health insurance market, and the group health insurance market. It's no coincidence that 48% of Americans don't think the healthcare bill will have any effect upon them personally.
The fact is, since most Americans have
group health insurance from an employer, many of them
won't see any major change in their costs or coverage.
The real problem has always been the individual health insurance market, particularly since small business owners aren't allowed to compete in the group market, leaving them to find a way to cover their employees on the more expensive individual side.
And individual health insurance is definitely more expensive - significantly so. Group health insurance offers insurance companies a percentage of healthy people paying premiums and subsidizing the costs of unhealthy people, so large corporations and institutions can purchase coverage for much, much less than an individual.
In short, the odds are better for the insurer when groups purchase medical coverage. Only a certain number of people will fall ill, and the rest will stay healthy.
Facts on:
The Healthcare Bill
Did you know...
More than 1/3 of Americans don't know how the healthcare bill will affect them?
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However there's no cushion like that for insurance companies when individuals try to purchase coverage. Small business owners are also burdened by the costs of purchasing coverage on the individual market, which is likely why so few small businesses can offer coverage.
For the most part, the men and women in America who don't get health insurance through their employer are more positive about the new healthcare bill, after all they make up the majority of the 47 million Americans who aren't insured.
Those who enjoy group health insurance are more likely to have a negative take on the new bill, or to simply feel that the bill doesn't apply to them.
However, since all Americans must absorb the costs of the uninsured when they are eventually treated for illness or injury in a hospital - after all that's why insurance companies are raising prices, to compensate for the growing costs that hospitals are forced to absorb - the truth is that all of America is invested in the establishment of some new form of healthcare to lower costs and improve care.
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