Individual vs Group Health

[Parselmouth]

What are your thoughts about working on individual products verses group products within health? Is either easier/harder? Aside from company specific considerations, does either have more opportunity than the other?

[Toll Free]

Here are my thoughts, in no particular order:

- When you say individual health, are you referring to individual major medical only, or all individual health? For many carriers, "individual health" is largely disability business, which is extremely different from group health.
- Group health should probably be divided into Large and Small group. Large group tends to be broker driven, and sold through large carriers (you can probably name all of the large group carriers in your local market, just from radio ads). Small group is more agent driven, the most highly regulated health segment, and is more likely to be written by smaller carriers. Individual carriers are also likely to be smaller. (Small, naturally, being a relative term.)
- Blue Cross plans are a different animal altogether, since they are highly geographically concentrated, and have historically had different issues to deal with; they may be non-profit, and are often considered to be the carrier of "last resort". They also have a tendency to have really good market share.
- Yes, the two products are different. Individual health (by this, I mean major medical, PPO, and HMO products) need a lot more "babysitting" than Group products do, especially medium and large group. In particular, the effects of underwriting are enormous with IH. The phrase "selection spiral" always comes up with an individual product, and almost never in the medium and large group environment.
- The preponderence of the market (90%+?) is group. On top of that, a good chunk of the individual market is written by Blues plans.
- In terms of "difficulty", I would say that Individual products are much more difficult to deal with than group products, if only for the constant anti-selection issues. The beauty of all health products, IMHO, is that the "difficulty" doesn't really lie in the actuarial work, but in the business issues. In five years, we know what life insurance contracts are going to look like. In five years, we have no idea what health insurance is going to look like.

Hope that helped.