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Health Care Insurance — Getting maximum coverage with the lowest premiums

Selecting Health Care Insurance coverage can be stressful. There are only two major classes of this type of insurance, group and individual, but the variations available in each class are often confusing to the average consumer.

Most group polices are negotiated and implemented by employers, large and small, to participating employees and their families or to members and families of some professional or service groups and associations. The benefits are enormous for the employees of companies who provide practically any type of group coverage. With larger numbers of participants of varying age, sex and health profiles, the risk is spread out. Young and healthy participants, who generally make fewer claims, help to keep the average premiums low. Additionally, most employers split the premium payment with the employee. Employers who furnish group coverage to their employees also enjoy the benefit as they are able to deduct their portion of the premiums from their taxes.

To keep costs in line, employers are opting out of the traditional “fee for services” policies that allowed the insured to choose the treatment, health care facility and doctor on their own. More group policies now implement some type of managed care. These policies allow the insurer to manage expenses by specifying providers for medical procedures at negotiated prices. Many group policies provide some level of prescription drug coverage and a few have limited dental coverage. Sadly, with the tough economic times and rising health care costs, many employers are phasing out their group policies.

Individual health insurance is the second major category. Individual or private plans cover both individuals and families. Usually, their premiums are significantly higher than group plans. Carefully choosing your insurer and coverage options might enable you to narrow the premium gap. Increasing the deductible portion of your policy and accepting higher co-pays also reduces premium.

Unlike group plans, individual insurance is “medically underwritten.” The insured’s age, sex, and current and previous health status are the dominant factors in determining the premium. Certain pre-existing medical conditions, such as diabetes will result in denial of coverage in most instances. Those denied will have little choice but to seek coverage from a state’s high-risk insurance pool. A very expensive alternative. Remaining in good health and avoiding lifestyles that contribute to poor health is the smartest an individual can make to cushion the expenses of health care premiums.