Group Health Insurance isn't Always Cheaper than Individual Health Insurance.

Conventional wisdom dictates that a group health insurance policy will always be cheaper then an individual insurance policy. After all the buying power of the group makes it easier for them to buy affordable health insurance. Yes, in theory but that is not always the case, especially as regards smaller groups.

Here is the scenario. A trade group or organization offers its members low-cost health insurance. You join like many others mainly to have access to those affordable health benefits. After a time you find that year after year the cost for the coverage keeps rising. So you leap frog to another group where the premiums are lower. What happens is that the original group is then left with only people who cannot get insurance anywhere else because of existing conditions creating a greater pool of at risk people in the group, who are making claims against the insurance and continuing to drive rates up, up up. It is what is called in the industry an "actuarial death spiral" -and it doesn't only happen to small groups.

Think celebrities have it made? Maybe they do - but not everyone in the entertainment biz pulls down a multi-million dollar income. And many of those in the entertainment industry including some in the Screen Actors Guild, rely on health insurance through a group called the Entertainment Industry Group Insurance Trust, which has recently experienced a similar "spiral". The Group purchases its health insurance from Cigna. Recently in New Jersey and California Cigna had to raise the rates to group members a whopping 82%. This means that some people in the group have a monthly premium of over $3500.00. Certainly they can do better with and individual health insurance policy Even while last year the national average on health insurance rate increases was only about 6% this example illustrates how many groups and small businesses and their members or employees can get priced out of the insurance market. A Cigna spokesman said it had to raise the rates because the group's costs were more than double that of similar sized groups, and that is due to it being a group of aging and less then healthy policyholders.

As an individual, certainly as one that practices wellness techniques and is basically healthy, chances are you can find an individual health insurance policy that can be more cost effective then group health insurance, and your rates will not be subject to health conditions and claims made by less healthy members of the group. Yet for others who cannot qualify for the most affordable individual health plans, a group plan still may be they way to go. You can explore all your options and get a free quote at websites such as insurancebudget.com