A new study shows that most employees in a large majority of the states would do better with an individual health insurance plan rather than participating in group coverage.\u00a0 Zane Benefits, which provides a Software-as-a-Service platform for employers, found that individual plans cost 50% less than group coverage for an average of 80% of those applicants who medically qualify.\u00a0 According to the study:<\/p>\n
\u201cThe dramatic relative price change between individual versus group policies has occurred because 45 U.S. states allow insurance carriers to distribute individual health insurance with medical underwriting. Allowing medical underwriting means that insurance carriers may reject, accept, or uprate (i.e. charge more for) applicants based on their health status or age. KY, WA, and NH changed in 2003 to allow medical underwriting.\u201d<\/em><\/p>\n Of course, medical underwriting is what those who believe in a free market would call the way insurance is supposed to work.\u00a0 An insurance company is taking a financial risk based on a number of quantifiable factors \u2013 your health status and your age are just a couple of the most common \u2013 and charges you a premium that takes into account payouts, overhead and, of course, profit.\u00a0 States that attempt to manipulate this underwriting process by forcing insurers to accept all applicants and not allowing them to adjust premiums are called \u201cguarantee issue\u201d states \u2013 and it should be no surprise that these states also have the highest rates for individual health insurance.<\/p>\n The study also notes that current regulations may make individual health insurance even more affordable that the study suggests.\u00a0 These include:<\/p>\n The study reaffirms our belief that while health care is far from perfect and in need of reform, it is often innovation and new ways of thinking about coverage that offer brighter and more affordable solutions that government mandates and intervention.<\/p>\n\n
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