What is the main difference between group and individual health insurance plans?

The main difference between group and individual health insurance plans lies in the underwriting process. Group plans generally do not require medical underwriting, meaning that all eligible members of the group can be accepted into the plan regardless of their health status. This characteristic is a significant advantage of group insurance, as it allows employers or organizations to provide coverage to their employees or members without the risk of excluding individuals due to pre-existing conditions.

In contrast, individual plans often involve a detailed underwriting process, which may assess an individual's health history and could lead to higher premiums or denial of coverage based on pre-existing conditions. This distinction makes group plans more inclusive, allowing for a broader range of individuals to obtain coverage without the barriers that individual plans may present.

Additionally, while group plans can often be more cost-effective and cover a wide array of services due to the pooling of risk among a large number of members, which helps reduce costs, this is not universally true for every situation. Individual plans do tend to allow for more tailored coverage options and may provide better access to specialists depending on the specific plan chosen. However, these factors do not invalidate the primary distinction related to the underwriting process in group plans.