Group Health Insurance
Group health insurance is a medical insurance that covers a group of people, who are usually the members of societies, employees of a common company, or professionals in a common group.
What is a Group Health Insurance Plan?
A Group Health Insurance plan is a health insurance plan that provides coverage to members of a group that tends to be employees of a company or members of an organization. Members of the group usually receive insurance at a reduced cost because the insurer’s risk is spread across a group of policyholders.
Benefits of a Group Health Insurance Plan
The primary advantage of a group plan is that it spreads risk across a pool of insured individuals.
- This benefits the group members by keeping premiums low, and insurers can better manage risk when they have a clearer idea of who they are covering.
- Insurers can exert even greater control over costs through health maintenance organizations (HMOs), in which providers contract with insurers to provide care to members.
- The HMO model tends to keep costs low, at the cost of restrictions on the flexibility of care afforded to individuals.
- Preferred provider organizations (PPOs) offer the patient greater choice of doctors and easier access to specialists, but tend to charge higher premiums than HMOs.
- The vast majority of group health insurance plans are employer-sponsored benefit plans. It is possible, however, to purchase group coverage through an association or other organizations.
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