As Costs Rise, Some Workers Turn to Private Insurance

Private health insurance plans are gaining popularity among small-business employees as premiums and out-of-pocket costs continue to rise for employer-based plans, Dow Jones/Ventura County Star reports.

According to a recent survey by the Kaiser Family Foundation and the Health Research Educational Trust, 37% of small-business employees pay at least half of the premium for family health coverage, compared with 5% of employees at companies with more than 200 workers.

Gary Claxton, a vice president at the foundation, said the number of workers opting out of employer-sponsored coverage "could increase if employees face further cost increases and are willing to take less generous insurance coverage."

One advantage of private policies is that healthy workers can opt for higher-deductible plans with lower monthly premiums. In addition, policyholders can maintain the same coverage regardless of job status.

However, unlike most group plans, private plans can deny coverage based on pre-existing medical conditions. The plans could prove more costly than employer-based plans in the long run because they are not as comprehensive (Knight, Dow Jones/Ventura County Star, 11/14).