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Small Business Employee Benefits and HR Blog

3 Common Individual Health Insurance Misconceptions

I just read this post on CBS News.  I realize that it's hard to effectively summarize a person's health insurance options in a three minute story, but that's no excuse for saying things that are either misleading or completely untrue.

Here are a few problems I found with the story:

Individual health insurance cost vs. group health insurance cost

They suggest that in some wacky instances, individual insurance is actually cheaper than a group policy.  There are certainly some problems with individual insurance, but it's almost always cheaper than group.

Individual health insurance and COBRA

The article implies that once you lose your job and exhaust COBRA, you should start looking at individual policies.  If you're worried about losing your job (and especially if you have already lost it), you need individual insurance before you lose the option of employer coverage.  It's incredibly irresponsible to wait to get laid off before looking into more reliable coverage (hence the word "insurance"). 

Which states have guaranteed issue individual health insurance?

This is the worst one.  They say that a state insurance commissioner can tell you "if your state has a 'high risk' pool." The federal government requires every state to provide health insurance options for people that can't get it elsewhere.  In many states you have to be HIPAA eligible to qualify, but every single state in this country has risk pool for people that can't get individual insurance.

These problems might not seem that major, but it's frustrating how the media seems to assume that you should sit on your group coverage and then exhaust COBRA just because their are no other options.

If you think you'll lose your job, group insurance is the worst option available, not the best.

 

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