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Individual, Group, Short-Term & Public Health Insurance


The major difference between group and individual health policies is the size of the pool across which risks are averaged. In group insurance, risks are pooled over large number of people so costs are correspondingly lower. Individual insurance risk is concentrated on one person so costs tend to be higher.

Importantly, group insurance can only be purchased if you are a member of a group offering health insurance.  Previously if you were not a member of a group offering health insurance, you could not purchase group health insurance.  This meant that when applying for an individual policy, the insurance companies was free to deny you individual coverage if they considered you an expensive health risk.

However, with the passing of the Affordable Care Act this has changed.  People can now apply for coverage through the open marketplace and are not able to be excluded for pre-existing conditions.  The Affordable Care Act contains comprehensive health insurance reforms and includes tax provisions that affect individuals, families, businesses, insurers, tax-exempt organizations and government entities. However, the law requires you and your dependents to have health care coverage, an exemption, or make a payment with your annual tax return.  If you purchased coverage from the Health Insurance Marketplace, you may be eligible for the premium tax credit.  For more information, visit https://www.healthcare.gov/.

Health Insurance for Periods of Unemployment

If you are like most people, you get your health care coverage through your place of employment. But, what happens when you are separated from your job because of a layoff or firing? You generally lose your health insurance! There are options available, however, to help tide you over until you can get new more permanent insurance. You can purchase what is called Short-Term Coverage. Short-term coverage is regular medical coverage that is designed to fill in the interim periods when people are unemployed or changing jobs. Short-Term insurance can be purchased for terms of 30, 45, 60, or 90 days. There is a monthly premium and co-pays and deductibles may apply depending on the insurance company. Other than the term limitations, short-term insurance is just like regular health insurance.

Another option health insurance option is COBRA. This is a federally mandated program that requires employers to provide families access to group health care policies for 18 months (or up to 36 months in the event of an employee death) after someone is laid off or fired (or dies). Although health benefits continue undisturbed under COBRA, the employee or family is responsible for paying 100% of the premiums (plus a small fee at the employer's discretion) which can be very high. Recall that normally, group health insurance premiums are subsidized by employers. If you can afford to pay for COBRA-mandated coverage, it is generally a good idea to do so as such coverage is generally better than what can be purchased as an individual.

It is wise to always purchase the best health insurance you can afford to cover you and your family and dependents, and to maintain this coverage in some form at all times. Even when you are laid off and have no money to speak of you should still purchase at least minimal catastrophic coverage. Choose regular group health coverage when you are employed, and at least short term coverage or catastrophic coverage during periods of unemployment.

You can also now purchase a policy through the open marketplace under the Affordable Care Act.  For more information, visit https://www.healthcare.gov/.

Public (Social Services) Health Care

People without insurance can take advantage of a number of social service programs to assist them in paying for medical bills. The availability of such assistance varies from community to community, however. Nationally, Medicaid and Medicare are governmental programs designed to provide care for those without insurance coverage and without financial means. Medicare provides coverage for people over 65 years of age, some disabled people under 65 years old, and people with permanent kidney failure. Medicaid, on the other hand, provides coverage for the poor and those requiring long-term medical care. Access to these programs is highly restricted and the coverage they provide is limited.

The federal government and state governments coordinate benefits for those covered under Medicare and Medicaid programs, so the coverage varies from case to case and state to state. The nature of the medical claim as well as the state where the claimant resides will determine coverage. Thus, benefits under either program cannot be neatly cataloged. For more coverage information, refer to the Medicaid website or your local Medicaid or Medicare office.