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Comment by Guvante | Hacker News Reader

Actually the major thing with group insurance is the number of people.

It is unlikely that more than 1 or 2 people in a small company will have any major health issues, so if you are signing up 20 people your overall risk is lower (in your example a $10,000 per person cost).

Combined with different feelings toward risk, usually health insurance is a win win. The annoying thing about the recent "reforms" is it mandates preventative care be covered, eliminating the ability to get pure "oh crap" coverage.

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Number of people is actually not as big a factor as it is made out to be. For major medical and certain supplemental health like dental, there is a load for small groups, but it isn't very much. The risk is certainly higher, but one large claim can make a group's loss ratio beyond what can be recovered, so the additional premium has to be spread across the small group category. The biggest factor which is often overlooked is that the insured is "actively at work" which lowers the potential risk, because working people are healthier and the insurance company can add underwriting factors for certain industries. Another thing to note is even if you are allowed to select a voluntary product like dental or health indemnity product, there is little or no choice on the specific riders or benefit amounts which lowers the "anti-selection" for riders. Products that are partially employer-paid like major med and/or a group's participation percentage being high also limits the potential anti-selection. Disclaimer: work in Actuarial

That makes sense to an extent. It goes out the door with family plans (to me). Is a spouse more likely to be healthier because their partner works? Child because parent?

> The annoying thing about the recent "reforms" is it mandates preventative care be covered, eliminating the ability to get pure "oh crap" coverage.

This is only annoying until you realize how many people have incurred significant costs by avoiding preventative care. Why do you think insurance companies are so quick to run campaigns for healthy-living, vaccination, regular physicals, etc.? They'd much prefer to pay a few hundred dollars a year for you on a known schedule than deal with open-ended late-stage problems.

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