What characterizes a Group Health Insurance policy?

A Group Health Insurance policy is characterized by its ability to cover groups of individuals, such as employees of a company or members of an organization, often at a lower cost compared to individual insurance plans. This is primarily due to the concept of risk pooling, where the insurer spreads the risk over a larger number of insured individuals, leading to lower per capita costs. The nature of group policies allows for more affordable premium rates as the costs are divided among many participants, which can make healthcare coverage more accessible for members of the group.

In contrast, individual policyholders often face higher premiums because the risks are concentrated on a smaller number of insured individuals, making it less economically viable for insurers. Furthermore, group health insurance is not exclusive to government employees; it can be offered in various sectors, including private companies, non-profits, and educational institutions, thus indicating its broader applicability.