Thinking about dropping your employer-sponsored health insurance for an individual medical insurance plan? « Health Insurance Advisory

Thinking about dropping your employer-sponsored health insurance for an individual medical insurance plan?

Is medical insurance through your employer no longer affordable? According to a report just released by Kaiser Family Foundation, the average annual total medical insurance premium for family coverage for employer-sponsored group health coverage increased to $15,073 in 2011. This represents more than a 9% increase from 2011. Many insurance analysts and benefits experts attribute 11-15% of the 9% increase to the new healthcare law. Worker’s wages, however, only increased 2.1% and general inflation by 3.2% from 2010 to 2011.

As the economy continues to struggle, many employers continue to shift health insurance costs to their workers. This can take several forms, such as increased deductible and copays (insurance benefits are decreased in order to lower premiums) and requiring employees to contribute more toward the cost of medical insurance.

Is your employer-sponsored group medical plan worth keeping or is time to start finding other health insurance? If you are contemplating other medical insurance options, then read on…

Contrary to popular myth, a private individual or family medical insurance plan is likely to cost you less. However, it really depends on the following factors:

How much of the total premium does your employer pay toward the cost of employer-sponsored health insurance? Most companies cover the majority of the cost for single coverage, but pay much less for family coverage. If that is case with your employer, then you may want to consider, for example, covering your dependents separately under an individual or family medical insurance plan.

What is your age and health status? Next time you are at the water cooler take a look around. If your typical co-worker is older than you, then your employer’s health insurance premiums are likely more expensive. This means you are probably paying more for employment based health insurance that you otherwise would because you are helping to subsidize the cost of older workers. However, if you are older than your co-workers and/ or your health status is worse (you smoke, are overweight, have pre existing medical conditions, etc.), then employment based health insurance may likely be a better value.

Can you qualify for individual or family medical insurance? At the end of the day, your ability to secure lower cost medical insurance is going to depend on your 1) age and health status. Your health status, however, is the biggest determinant of what you will pay for an individual or family medical insurance plan. Under the new healthcare law, health insurance companies can medically underwrite and decline applicants based on their health status until January 2014. In 2014, health insurance companies will be prohibited from medically underwriting individuals and excluding pre existing conditions from being covered (today, health insurers can use Exclusionary Riders to carve out existing medical conditions from being covered under an individual medical insurance policy). Also taking effect in 2014, are special rating restrictions. These essentially limit how much health insurance companies can charge unhealthy applicants by a multiple of what the youngest and healthiest individuals pay for medical insurance.

So, should you make the switch? It never hurts to shop around. If you have existing health conditions and not sure if you or a family member will qualify for an individual or family medical insurance plan, then check out our exclusive Underwriting Profile Tool™. It will estimate your insurability based on how you answer sample medical questions.

If you can secure a lower cost alternative, before committing you will want to understand the pre existing conditions provision of the new policy. For example, will the health insurer cover all health conditions disclosed on the application? If yes, then you can have greater security knowing that you are fully covered.

As it relates to renewal increases. It has always been said that employer-sponsored medical insurance offers great security because renewal increases are more affordable. If you obtain an individual or family medical insurance plan from a quality, top health insurance company, then this is less of a concern, especially since the enactment of the new healthcare law (PPACA). Health reform now requires health insurers to file and publically post “unreasonable” rate increase of 10% or more. The point is, the health insurance industry is becoming more transparent and insurers are under greater pressure to limit rate hikes. The point is, there is greater stability post-healthcare reform regarding future rate hikes.

For affordable online health insurance quotes, including high deductible health plans and Health Saving Accounts visit Our mission is to help Americans find and secure low cost medical insurance regardless of health status. If you need assistance with learning your medical insurance options, such as COBRA Continuation and HIPAA Portability, we can help you too!

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