How much do personal policies cost?

If you are healthy, personal health insurance policy coverage now typically costs much less than the price of similar-benefit group coverage in 45 states. This is primarily because insurance carriers in 45 states are allowed to: (1) price based on age bands and (2) reject or charge more to applicants for personal policies with preexisting conditions.

Nationally, about 83% of the applicants for personal health policies from private insurance carriers, like Blue Cross Blue Shield, get accepted. But, federal law now requires all states to offer state-guaranteed personal policies (at higher cost) to HIPAA-eligible applicants who used to have group coverage. See What about sick employees?

The price of personal health insurance policies vary between states primarily because each state has different minimum requirements for coverage. For example, Texas requires a minimum lifetime maximum benefit per person of $3 million while California requires $6 million.

* The rates shown are for illustrative purposes only. The rates come from policies available in 2008 in the appropriate state for healthy applicants--such rates and policies may no longer be available and be increased based on health factors.  Please contact your local health insurance agent for accurate quotes on policies for specific applicants.

There is no fair way to compare personal health policy coverage to group policy coverage because they are not "similar". Aside from offering similar health benefits from the same insurance carriers:

• Personal health coverage is permanent and portable, independent of their employment. Last year 1 million of the 2 million U.S. families filing for personal bankruptcy protection did so because of health expenses, and 82% (820,000) of these families had group coverage when they first became ill.
• Group coverage is guaranteed-available at the same price to all eligible employees regardless of obesity, lifestyle, or preexisting conditions-that's why it is can be so expensive.
• Only 83% of applicants medically qualify for personal health policies, although this figure can vary between 60% and 100% based on the age and demographics of your employees. Once accepted, rates do increase with the claims of everyone in your state with personal coverage, but from a much lower base price and from a carrier-selected much healthier group of individuals.
• Applicants rejected or charged more for personal policies must receive coverage from another source (e.g. spouse’s group plan) or state-guaranteed coverage. State-guaranteed personal coverage is expensive—most states charge more than the federal guideline of 200%-300% the price of similar private carrier coverage. However, the blended cost per family can still be less than similar group coverage, because families typically obtain state-guaranteed coverage for their one unhealthy member and much less expensive private carrier personal coverage for the rest of the family.