Kids and Health Care: How Do You Get Health Insurance?
Health insurance is generally available on an individual or group basis. Premiums tend to be lower for group coverage -- and this is how most people get their health insurance.
Group coverage is typically offered through your employer, but unions, professional associations and other organizations also offer this type of insurance. When you receive group insurance at work, the premium usually is paid through your employer. In some cases, the employer pays some or all of the premium as a benefit; in others, the premium is deducted from your pay.
Group coverage has distinct advantages:
- First, and simplest, groups have more buying power than individuals.
- Second, groups allow for what actuaries call risk pooling. This means that groups tend to be less risky because all members pay premiums -- but only a few (if any) members need medical care in any given month.
- Third, administrative and brokerage costs are usually paid by the employer. These costs can be larger for health insurance than other kinds of coverage (life, auto, home, etc.).
For all of these reasons, eligibility for group coverage is usually open when you start a job -- you won't have to undergo a physical exam to prove you're insurable.
Individual insurance is a main option if you are self-employed or work for a small company that doesn't offer health insurance. An individual policy works in the same way that a group policy does; the main difference is that the premiums are usually higher because the administrative costs are, too.
Federal law makes it easier for you to get individual insurance under certain situations. If you aren't covered under a group plan and can't get insurance on your own, check with your state insurance department to see if it has a medical coverage risk pool. Like risk pools that group health plans create, these state-run pools can provide health insurance if you can't get it elsewhere. But their coverage can get expensive.
One advantage of individual insurance: You can tailor a plan to fit your needs. However, shop carefully. Coverage and costs vary widely, so be sure to evaluate the medical services covered, benefits paid, what you must pay in deductibles and co-insurance -- for each kind of coverage.
