It doesn’t make sense, does it? Logic tells us that buying
in bulk is more cost-effective. So when you take the purchasing power of a
group of people, you would expect to negotiate a better premium price per
person for health insurance than that of an individual trying to purchase
coverage. But health insurance doesn’t work that way.
Group insurance is required to cover a wide range of
pre-existing conditions. The insurer of a group understands that,
statistically, a number of members will already suffer from ailments such as
heart disease, diabetes, and cancer, so they charge a premium that will cover
the treatment of these potential illnesses.
However, health insurance companies that cover individuals
can pick (and reject) whom they choose to cover.* Because individual health
insurance companies offer their plans to only the relatively healthy, premiums
can be substantially lower than group premiums.
It always comes down to the bottom line: health insurance
companies are just that—companies. Prices are set to not just cover costs, but
to ensure profits at the end of the year. But the silver lining is that every
health insurance company in the state of Colorado
is regulated by the Colorado Dept. of Regulatory Agencies, Dept. of Insurance.
For more information, you can visit their website or give me a call at 303-541-9533.
I’ll cut through all the jargon and get your questions answered quickly.
*With some exceptions: for example, during certain times of
the year, a child under the age of 19 cannot be denied coverage.