Employer sponsored health insurance isn’t always worth it

At least in North Carolina, it’s sometimes cheaper to buy health insurance on your own rather than through your employer. It’s especially true for people in good health. For example, one employee found he could get insurance for his family for $303 compared to $700 if he went through his employer. If you’re not in good health, you’re better off sticking with the employer coverage.

BCBS of NC has seen the number of individual policies skyrocket over the last few years. As healthy people opt out of the employer-based system, employer premiums will rise and fewer employers will offer coverage. Those that do may end up discriminating against the sick and at- risk to keep costs down.

In Massachusetts insurers ore only allowed to price based on zip code and age. Maybe that’s a better policy.

July 3, 2005

4 thoughts on “Employer sponsored health insurance isn’t always worth it”

  1. $303 vs. $700 a month doesn’t really mean anything by itself. The $303 may very well be catastrophic coverage (at that price, it probably is) while the $700 may be comprehensive. There’s a world of differnece between the two, so it’s important to understand that price isn’t always the only difference.

    In North Carolina, BCBSNC is very close to having a monopoly on health insurance. This means that health care providers pretty much get whatever BCBSNC decides to pay. Discounts are extremely deep, and the number of providers is falling rapidly as they go to states that have more reasonable insurance landscapes. BCBSNC also has terrible customer service and uses any excuse it can get to deny coverage for a procedure. I’m glad I’m no longer anywhere near it.

  2. Agree. What does $303 pay for? We had “cheapie” insurance for a couple of years. It turned out to cover practically nothing.

    Sometimes you get what you pay for.

    The solution will be to lift mandatory benefit mandates from the traditional payers and let them compete for small businesses and individuals.

  3. No doubt the two plans are dissimilar. But just how much real benefit is derived from the additional $400? My guess is not anything near what you pay.

    How many times can you go to the doctor for a $40 copay vs a $10 copay and justify paying $400/ month more?

    Employer plans are usually quite rich in benefit but few will ever fully utilize the plan. It’s like buying a car capable of going 180 MPH for a road with a speed limit (and built for) top speeds of 75 MPH. Why pay for all that extra if you can never use it?

  4. .
    I think that Catherine and Rob both miss the point, as Bob has observed:

    It’s not about what the individual plan costs, it’s about what one can do with the savings. By definition, group plans are “one size fits all,” and often cover (and charge for) benefits which a given emnployee may neither need nor want.

    For example, most group plans cover, and charge for, maternity benefits. But what if you’ve had your tubes tied? Doesn’t matter, you still pay for it. And the list goes on.

    I do agree with Rob regarding mandated benefits, but these plague the individual market, as well.

    And Catherine’s point about BX is important, but irrelevant: market share has nothing to do with whether coverage is employer-based or not.

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