Q. Why Is Health Insurance for Individuals Inexpensive?

A.  Health Insurance for individuals and families typically costs one third to one half of business or group insurance. This price difference is due to several factors. First is the 80/20 rule. Twenty percent of the people spend eighty percent of the health insurance dollars. So, insurance companies try to insure the eighty percent that consists of healthy people and can therefore offer much lower prices. Secondly, most individual policies do not include maternity coverage in the base insurance policy and you must pay extra to buy the maternity coverage. And finally, many health insurance policies limit pharmacy coverage to an annual maximum. Because some new drugs can cost up to $50,000 to $100,000 per year per patient, limiting the amount of pharmacy coverage results in lower prices for individual policies.

            So in choosing a health insurance for your family or as an individual, it’s important to note these three big differences. If you are unhealthy, have a chronic condition, if you require a lot of medications, or if you’re planning to have a baby, individual and family policies may not be a good fit for you. However, if you’re not in one of these categories, you can save a lot of money on health insurance.