How does an individual health insurance plan differ from a group health insurance plan?

The correct choice highlights a fundamental distinction between individual and group health insurance plans: individual plans are purchased by a single person, whereas group plans are typically offered through employers or organizations.

This means that when an individual opts for a health insurance plan, they are responsible for selecting and purchasing that coverage based solely on their personal needs and circumstances. In contrast, a group plan pools together many individuals—often employees of a company or members of an organization—allowing for potentially lower premiums and shared risk due to the larger number of individuals in the plan. This group purchasing power often leads to different terms, coverage options, and overall cost structures compared to individual plans.

The other options do not accurately reflect the primary differences in how these types of coverage are structured. For example, individual plans are not necessarily free; rather, they require premiums similar to group plans. Additionally, it cannot be generalized that group plans have higher deductibles than individual plans, as deductible amounts can vary widely based on the specific plan and provider. Lastly, group plans typically do not have limitations on covering specific ailments compared to individual plans; in fact, coverage often tends to be broader due to the collective bargaining power of groups.