Individual Health Insurance vs. Group Health Insurance
The term health insurance is a very broad term. We must be more specific and deal with medical insurance. Health insurance could also mean dental, vision, or other types of coverage. Specifically when dealing with individual medical insurance the carrier in which an applicant has applied for coverage can be declined. Individual medical insurance is approved based on what underwriting with the carrier determined by reviewing the health insurance application/ questionnaire. It is a simple concept. The carrier must make enough money to pay other claims from other participants. Underwriting may have certain guidelines to follow in order to approve an applicant so they can make an educated guess that this medical insurance applicant is truly insuring against a risk and they do not have a medical condition currently. That is not insurance. Insurance is insuring against a risk. Many people forget this when talking or dealing with health insurance.
Group medical insurance is similar in the aspect that an underwriter must review applicants in order to approve a group/ company for health insurance benefits. A major difference when dealing with group health insurance is when an applicant applies for coverage they will not be denied coverage if they are part of a group. They must be covered. The concept here is the health insurance premiums of the whole group are used to offset any medical condition of a few or one employee. Now, a group can be denied. Small groups usually cannot be denied coverage but just given a very big load or high rate from an insurance carrier underwriter if their applications may have many conditions which will cost the carrier a lot of money in claims. Larger groups, usually over 50 can be denied when they are getting health insurance quotes. If an insurance company underwriter reviews a group’s applications and see that the group has limited medical conditions many times this will be where the groups rates may be less than an individual health insurance rate. At this same time, the health insurance benefits can be better as well.