What is Family Health Insurance?

If an individual is insured it's called individual health insurance. If 2 or more family members are insured on the same policy, it's called family health insurance. Duh! But there are differences in how health plans work for families versus individuals. The main difference between is the deductible. The deductible is a set amount that a person will be required to pay without reimbursement until the amount they have spent on covered medical expenses reaches the deductible amount. After the deductible has been met, subsequent medical services will be covered.

Individual Deductible Family Plans

Some family insurance has separate deductibles for each individual and then a family deductible limit. For example. a plan might have a $5000 deductible for each family member and a $10,000 deductible limit for the whole family. What that means is that any given individual in the family must reach $5000 in covered medical expenses before the health plan begins to pay. Also, let's say that this family has 3 individual members and that the total in family expenses exceeds $10,000, from this point on through the end of that calendar year all family members will have been deemed to have met their deductible. Statistically, only one family member usually has major medical expenses in a given year, so the individual deductible plan is generally recommended.

Aggregate Deductible Family Plans

Some family health Plans have one deductible for the whole family. For instance, a plan might have a $10,000 deductible for the family and each family member's covered medical expenses are combined to meet the $10,000 family deductible. HSA qualified plans usually have this type of deductible. Statistically, only one family member usually has major medical expenses in a given year, so the $10,000 family aggregate deductible is usually harder to reach. We generally recommend family health plans with this type of family deductible, but there are situations when an aggregate deductible is preferable, for instance a large family would have a greater chance of meeting the family deductible with no single individual accounting for $5,000.

Family Health Insurance Rates

Health insurance companies use different methods of computing family health insurance rates. Some companies, have a single family rate regardless of the number of children in the family. In such a case, it may make sense for a family with a single child dependent to purchase multiple insurance policies rather than one which covers the whole family. Because a set family rate plan will cover many dependents, it may be unnecessarily costly for a family with only one child. It might be cheaper overall to buy a child-only policy for the child and another policy for the parents. As a side-note, it is important to remember that if one member of the family has some preexisting condition and is going to receive an increased rate, the buyer should make sure that the entire policy is not rated up but is rated up just for that family member.

Why You Need Family Health Insurance

However, recent studies have shown that the uninsured are often forced to pay 2.5 times what most health insurers paid. Those who do continue without health insurance are less likely to receive the proper care when it is needed. A study spanning over eight years found that the "uninsured receive less care and experience worse outcomes". Children who have discontinued health coverage are also extremely at risk. A 2005 study shows that children without medical care for even part of a year commonly do not seek medical attention and do not get prescriptions filled.