By Bill Rusteberg
The economic difference between individual health insurance and group insurance is enough to write home about. Most employers pay nothing towards dependent premium cost while Uncle Sam often does for those choosing individual health insurance plans.
Texas school employees know this. Average dependent participation in district sponsored group health insurance plans is less than 12 % representing a small fraction of eligible dependents qualifying for coverage. Families cannot afford the cost of dependent coverage often to the tune of $15,000-$25,000 per year.
They purchase individual coverage for their dependents instead. Government subsidies can reduce costs below $200 per month and in some cases less than $50 or even “Free.”
Cory has group insurance through his employer but can’t afford to add his dependents. His employer pays nothing toward dependent coverage. Cory learns that he qualifies for Uncle Sam’s generous premium assistance program and enrolls his dependents on individual coverage with a net cost savings of 90%.
This is a case of artificial economics driving market demand. In more cases than you can shake a stick at government subsidies applied towards the purchase of individual health insurance is far more generous than what most employers can afford to pay.
As long as broad government subsidies continue, group plans will remain a default solution for plan member dependents as long as employer contributions remain tagged to employee only premium rates.
Son: Daddy, what do you do for a living?.………Dad: I sell government subsidies!
