What's The Difference Between Inidividual and Family Health Insurance?

Those individuals who are not eligible for health insurance through their employer or other organization must go out into the health insurance market and shop for an individual policy. This is the case whether looking for health insurance for one individual only or one individual and his or her family. So, to answer the question posed in the title above, other than cost (family policies do cost more, depending on the number of family members) there is essentially no difference between individual and family health insurance.

Indeed, as mentioned throughout this site, when using the term individual health insurance, whether for one individual or one family, the "individual" descriptor actually refers to the fact that an individual policy is issued as opposed to a group policy. We have and will continue to use the terms interchangeably, though.

At any rate, individual and family health insurance plans can be sorted into two main categories: indemnity (fee-for-services) plans, and managed care (HMO's, PPO's, POS) plans.

Indemnity health insurance has been around longer than any other type of health insurance plan. For years, indemnity healthcare plans were the most popular type of health insurance coverage. However, as medical costs have continued to skyrocket and consumers (mostly employers) have tried to control health-related costs, this type of insurance has become less desirable.

Indemnity individual and family health care plans do tend to have higher costs, when compared to the relatively newer managed health care plans; however, such plans allow for greater freedom in choosing a medical care provider and facilities, while managed health care plans are required to stay within a predefined network of providers.

In the last two decades, individual and family managed health care plans have become the most common form of health care coverage offered in the United States, growing from 27% of the health insurance market in 1988 to about 90% today. The reason for this dramatic change can be attributed to the escalating costs of health care. In an effort to gain some control over health care costs, employers, who foot the bill for the majority of health care in the U.S., more often than not opt for managed health care plans since these plans typically offer significant savings over indemnity plans.

Selecting the right individual and family health insurance plan that best suits your needs requires a careful analysis of each plan's coverage and should not be based on cost alone. When shopping for family health care insurance, keep in mind that coverage and additional costs can differ greatly from one health insurance plan to another. So take your time and don't be afraid to ask questions.

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What's The Difference Between Individual And Family Health Insurance?