So what is the difference between group, individual, Medicare, & Medicaid insurance plans for health? How are group and individual coverage different? Does group or individual cost more?
Group, Individual, Medicare, & Medicaid Insurance Plans
There are several types of health insurance, and understanding each of these will help you make the right decision when choosing an insurance plan.
The most common types of health insurance are group, individual, Medicare, & Medicaid insurance plans.
Following is some information on each type of plan, including who qualifies, what is covered and the options you have to choose from.
Group Health Insurance
Group health insurance is provided through an employer, organization, or union. This is made possible through an agreement between your employer and an insurance company that handles group plans. Because the group plan provides insurance for a group of individuals, a discount is usually granted. Employers that provide group insurance usually pay a portion of or all of the premiums. Employees are responsible for paying the remainder of their premium and the premium amount due is usually taken off the top of their payroll check each pay period.
Employers may offer employees a choice among several plans such as managed care or indemnity, or they may offer only one type of plan. Many group plans include dental and vision benefits as well.
Group plans that are offered through unions, clubs, and organizations are similar to employer plans in that a discount may be granted for the group. Group, individual, Medicare, & Medicaid insurance plans. They differ, however, because each individual pays their own premiums in full.
Group plans can be beneficial to both employers and employees. Employers can claim premiums paid as a tax expense. Employees receive a discount and/or payment of part of their premiums, which results in very affordable health insurance. Also, these plans may offer more coverage for the money than some individual plans.
If your employer doesn't provide medical benefits, you can purchase individual insurance. With individual insurance, you can choose the company you would like to use and the type of plan that will best meet your needs. You can shop around and compare rates, benefits, deductibles, and co-pay arrangements to find the right plan for you. Unfortunately, you will be required to pay the entire premium and you will not receive group discounts.
If you are self-employed, you can deduct your health insurance premiums from your taxable federal income. This will help reduce the burden somewhat and allow you to have affordable health insurance as a business owner. You may also be able to deduct insurance premiums for your entire family. Check with your accountant to see how this works.
Indemnity or Managed Care Plans
Whether you have a group plan or individual insurance, you still have options within these two types of plans. You may have a choice between indemnity and managed care plans. These are similar in some ways, but very different in others. Both plans cover a vast array of medical, hospital, and surgical services. Many of these plans offer some type of prescription drug coverage and partial dental and/or vision coverage.
With indemnity insurance, you can choose any doctor for medical care and even change doctors when you want. You may have to pay a deductible with this type of plan. Also, your out-of-pocket expenses may be higher. With managed care, you can save money by choosing certain doctors that are part of the network, called network providers..
You will likely have a set co-pay amount such as $10 to $50 for each office visit. Prescription drugs are categorized as formulary and non-formulary, with formulary drugs being covered by the plan at lower costs. Three types of managed care plans are health maintenance organization (HMO), preferred provider organization (PPO), and point-of-service plans (POS).
Medicare insurance is a program provided by the federal government to seniors age 65 and older. Qualified individuals who are disabled or have end-stage renal disease (ESRD) may also obtain Medicare coverage. There are four parts to Medicare: Part A, Part B, Part C, and Part D:
- Part A provides hospital insurance.
- Part B is medical insurance for doctors and other related services.
- Part C, or Medicare Advantage, is a plan that gives individuals an opportunity to receive benefits from Part A, B, and D through a private health plan.
- Part D is prescription drug insurance.
Part A doesn't require a premium since it has already been paid through payroll taxes during a person's years of employment. Part B does require a monthly premium based on income. A premium is also required for Part D, but this premium will be higher if you don't enroll as soon as you are eligible for Medicare. Medigap is private insurance available to those with Medicare to help cover expenses that aren't covered by Medicare.
Medicaid insurance is provided through a federal-state program with each state having its own rules concerning covered expenses and eligibility. Medicaid is available to those with a limited income, pregnant women and their newborn child, and to those who are blind or disabled. Children may also be covered based on certain terms even if the parent does not qualify. You can check with your state's Medicaid office to find out the requirements.
Group, Individual, Medicare, & Medicaid Insurance Plans - The Bottom Line
We hope this article on group, individual, Medicare, & Medicaid insurance plans has been informative. These types of insurance differ one from another in many ways and cater to a variety of individuals and circumstances. Carefully research each type to find what will work for you.