Timeline for Why are Group health insurance premiums smaller?
Current License: CC BY-SA 4.0
10 events
| when toggle format | what | by | license | comment | |
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| Apr 3 at 19:30 | comment | added | user71659 | @Grade'Eh'Bacon "Currently" is no longer the case in the US. With the ACA (Obamacare) everything works like a group plan: everybody is required to have health coverage (individual mandate) and individual marketplace plans can no longer deny on or restrict pre-existing conditions. | |
| Apr 3 at 14:48 | comment | added | Grade 'Eh' Bacon | I don't think this answer is really accurate to what the asker is implying; the actual risk of an individual is pooled by the insurance company, which averages out the risk of many people to achieve the average net result, which is that premiums received in total > claims paid out in total. The cost savings are a result of group negotiation as a result of bargaining power, reduction of per-person admin costs, and, to @KateGregory's point, the implied actual health variance that might currently exist between group-plan takers, and those who specifically seek individual insurance. | |
| Apr 2 at 23:56 | comment | added | user71659 | @KateGregory You chose the worst examples: it's a vision plan; not insurance. There's no group requirement for vision. Orthodontics aren't covered in many plans either. Nonetheless, employers and individual/exchange insurers regularly offer multiple plans, so indeed if you're young and healthy, you may opt for the bronze HDHP, instead of the 0 deductible option. | |
| Apr 2 at 21:39 | comment | added | Kate Gregory | Perhaps so @user71659 but "I don't need coverage because my spouse has a great plan" is not "I don't need coverage because my kids have straight teeth and we all have good vision" | |
| Apr 2 at 21:23 | comment | added | user71659 | @KateGregory Disagree. I've bought small business group policies myself. Most group policies require that everybody in the group be offered insurance. Group policies only require something around 70-80% of the group be covered. The only time where 100% coverage might be required is if the plan is being 100% paid by the employer. Covered does not mean paid for, if an employee chooses to be on their spouse's plan at a different employer instead, they would still be covered. | |
| Apr 2 at 16:51 | comment | added | Tashus | @mhoran_psprep Yes, but that's why I specified 1000 employees of one company versus 1000 individuals. I think the answer lies in Kate's comment. | |
| Apr 2 at 16:44 | comment | added | Kate Gregory | Many group policies insist EVERYONE be included (and paid for) even those who would not buy coverage for themselves. 1000 people who all decided they needed coverage for braces (or glasses or whatever) are quite likely to be very different from 1000 random people. | |
| Apr 2 at 16:36 | comment | added | mhoran_psprep | @Tashus the bigger the group the more likely they have a spread of health conditions that mimic the entire population. | |
| Apr 2 at 15:50 | comment | added | Tashus | Is this really about pooled risk, or is it just a matter of collective negotiation? Why would an insurer expect the costs (i.e. payouts) to be lower for 1000 people who all work at the same company versus 1000 unaffiliated people who all have individual policies? The insurer pools the risk either way, no? | |
| Apr 2 at 12:34 | history | answered | mhoran_psprep | CC BY-SA 4.0 |