What's the Catch? Why do Personal health policies cost so much less for the same benefits?

In a typical employer group, 10% of employees consume 90% of the health benefits cost and 90% of employees consume only 10%. With Personal health policies, insurance carriers only accept the healthiest, up to 90% of applicants at a price typically 1/6 to 1/2 the price of similar group coverage.

But using Personal vs Group policies doesn't help just the 90% of healthy employees—it greatly helps the 10% of unhealthy employees, all of whom by definition have preexisting medical conditions (e.g. hypertension, obesity, diabetes).

These 10% of employees with preexisting medical conditions are the most likely to become ill, and are thus the most at risk for personal bankruptcy if they are covered by a group plan. Employees with a group plan lose their job and their health insurance if they become too ill to come to work, or are needed at home to take care of a sick child or spouse.

1. Every employee receives a fixed monthly allowance towards the purchase of their own personal health insurance policy.
2. The approximately 10% of employees with preexisting medical conditions (or their dependents) purchase a state-guaranteed personal health policy—with most of their medical expenses subsidized by state and federal government vs their employer, regardless of the size their income.
3. All employees no longer have the risk of losing their health insurance if they lose their job.
4. All employees no longer have the risk of their group policy becoming unaffordable when a fellow employee becomes ill.