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Health Insurance Guide
Life Would Be Simpler If We Had One-Size Health Insurance
The cover provided and the cost of health insurance varies markedly depending upon whether insurance cover is arranged for a large group, for a small business or on an individual basis.
For people covered by a large group plan, cover is normally reasonably comprehensive and less expensive, simply because there many people paying into the insurance pool from which claims are met.
For those people seeking individual health insurance however things can be very different. A falling number of insurance companies are prepared to write individual plans these days and, of those which do, many are unwilling to accept applications from individuals with pre-existing conditions. As a result, it is increasingly common today for those seeking individual health insurance plans to be denied cover.
For those people who are lucky enough to find individual cover, a look at the details of the plan and the costs involved will often leave them wondering if they are quite so lucky. With a long list of exclusions and loaded with out-of-pocket costs, many individual health insurance plans are certainly not what they used to be.
For people employed in small businesses (normally employing more than 2 but fewer than 50 people) finding suitable health insurance cover can also be a difficult matter. If an employer with a small business decides to arrange group cover for his employees, the costs of any scheme will usually be based on both the number of people wishing to participate and their state of health. This means that it takes only a very small number of employees who are considered to be high risk, or who have pre-existing conditions, to push up the costs for everyone in the scheme. Despite this, where cover is available, membership of a small business group plan will often prove to be a better option than arranging individual health insurance cover.
In general, large group health insurance schemes offer the best cover at the lowest price. Group health insurance cover is available to all eligible employees within the group and is often also available for members of an employee’s immediate family. Unlike small businesses group schemes, large group schemes have to admit all eligible employees regardless of pre-existing conditions or other high risk factors.
Although membership of a group scheme might prove to be the best option, there are circumstances in which you may feel that you need or want additional individual health insurance. Some group health insurance schemes for example exclude a range of medical services such as alternative medicine, dental and visual care, cosmetic surgery, experimental treatments, some mental and substance-abuse therapies and much more.
Look carefully at your employer’s group scheme and decide whether or not you need additional coverage. In simple terms, this will normally be a matter of weighing the additional benefits against of the cost and deciding what makes sense for you.
Blended rating: For groups with limited recorded claim experience, a method of forecasting a group's cost of benefits based partly on an MCO's manual rates and partly on the group's experience.
Exclusive provider organization (EPO): A health care benefit arrangement that is similar to a preferred provider organization in administration, structure, and operation, but which does not cover out-of-network care.
Non-group market: A market segment that consists of customers who are covered under an individual contract for health coverage or enrolled in a government program.
Underwriting manual: A document that provides background information about various underwriting impairments and suggests the appropriate action to take if such impairments exist.
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