Group insurance: a better deal for most people than individual plans.
This paper compares health plans currently available on the individual market with employer-sponsored plans. Points of comparison include the scope of benefits, cost-sharing provisions, premiums, expected out-of-pocket costs, and actuarial value. We draw from the 2007 KFF/HRET Health Benefits Survey, our own survey of individual-market plans, the MarketScan medical claims database, and a computer simulation of medical claims. We find that in 2007, employment-based plans covered 80 percent of all charges paid by the plan and the member, while individual plans covered 64 percent. For most people, premiums and out-of-pocket costs were more affordable in tax-advantaged employer plans than in individual-market plans. Proposed health reforms would fundamentally alter the plan offerings available to Americans, particularly those offered in the individual market.
McDevitt
Roland
R
Watson-Wyatt Worldwide, Arlington, Virginia, USA. roland.mcdevitt@watsonwyatt.com
Gabel
Jon
J
Lore
Ryan
R
Pickreign
Jeremy
J
Whitmore
Heidi
H
Brust
Tina
T
D003362:Cost-Benefit Analysis; D006264:Health Benefit Plans, Employee / Q000191:economics / Q000458:organization & administration*; D006801:Humans; D019458:Insurance Coverage / Q000706:statistics & numerical data; D015271:Insurance Pools / Q000706:statistics & numerical data / Q000639:trends*; D014481:United States