Most people receive private health insurance from the government through Medicare, union, or employer. Unfortunately, a few of these are uninsured. The rest often choose to purchase their own health plan via a private or government-run marketplace, or a local agent or broker. Whether you are wondering whether you should change the health insurance, purchasing a health plan for the first time, or trying to be qualified for an enrollment period due to a significant change in life, it’s a good idea to take a look at different types of health insurance to make an informed decision.
The 6 Popular Types of Health Insurance:
1. Fee-for-service Health Insurance
A fee-for-service health insurance, also known as an indemnity plan, typically involves pre-determined percentages of expenses or amounts paid to the members for covered services. These members might take responsibility for co-insurance amounts and deductibles. In most cases, they will pay out of their pocket first and then file claims to be reimbursed for covered amounts.
This can be a good option if you’re:
– Seeking a high level of flexibility for hospitals and doctors
– Aiming to have more service control at the expense of a higher-rate balance
– Accepting the burden of possibly increased administrative activities for claims and referral paperwork
2. Preferred Provider Organization Health Insurance
A Preferred Provider Organization or PPO plan encourages the members to use an existing network of preferred hospitals and doctors, which allows for a discounted and negotiated rate. You will have the freedom to see any specialists or doctors within the network instead of designating a primary care expert.
Also, you might need to pay a deductible annually before the insurance firm covers the medical bills. It is possible to have a co-insurance or co-payment for a few certain services. With this type, it might lead to a greater out-of-pocket cost.
A PPO plan would be an ideal option if you:
– Need flexibility while choosing a physician or other providers
– Prefer the burden of getting a referral to visit a specialist
– Enjoy the balance of better provider option versus a lower premium
3. Health Maintenance Organization Health Insurance
A Health Maintenance Organization or HMO plan offers a lower out-of-pocket cost and less flexibility when choosing hospitals or doctors compared to other types. You might be required to select a primary care doctor who would take care of all your healthcare needs. To visit a doctor, you might have to get a referral.
With the HMO plan, you are often covered for more preventative services. A deductible before the coverage is optional, but you would have the minimal co-payment. An important thing to keep in mind is that you won’t receive any coverage when you choose to go outside of the network without the authorization from your primary care doctor physician.
In general, an HMO plan might be a great option if you:
– Want lower premiums
– Enjoy the trade-off of in-network services
– Prefer good preventive options like coverage for immunizations and checkups
4. Health Savings Account Health Insurance
A Health Savings Account or HAS option is a tax-favored account instead of a health plan. It is often used with other high deductible options to pay for qualified medical costs, thus helping you to save a lot of money. In most cases, the monthly premiums are less expensive than those of lower-deductible plans. The contribution to a HAS plan might be prepared pre-tax, to several limits specified by IRS. Also, unused funds will role and accrue tax-free or interest over time. These funds can be used for other events in your life but might incur interest and penalties.
A HAS plan can be a great option if you:
– Prefer to have more control over how much, what, how, and when for care
– Want to have the balances of high deductibles
– Want to save money tax-free for future medical costs
5. Point of Service Health Insurance
This type of insurance combines the features of a PPO and HMO plan. This means that it requires the members to select a primary care doctor from network providers and isn’t subject to the deductible.
If you use the covered service which is referred or rendered by your primary care doctor, you might obtain a higher coverage level. If you use the service by a non-network provider, it is likely to be subject to a lower coverage level and deductible. In addition, you might need to pay an up-front amount and file a claim for reimbursed payment.
A point of service plan might be an ideal option if you:
– Need the flexibility when selecting a primary care doctor and other service providers
– Want the primary care doctor to coordinate your care
– Enjoy the balance of a better provider option
6. Exclusive Provider Organization Health Insurance
An EPO plan is relatively similar to an HMO plan since both options come with a network of hospitals and doctors that the members are typically required to utilize except in emergency cases. Also, they will choose a primary care doctor who provides referrals to any in-network experts. You take responsibility for a deductible and small co-payments.
An EPO health plan might be a great option if you:
– Want to have lower rates at the expense of less provider option
– Can choose the right services at a smaller panel
– Can afford possibly higher expenses for unplanned cases
In overall, no one kind of health insurance is better than the others as all of them can vary a lot in costs and benefits. Thus, it is essential to consider your preferences and needs carefully, as well as review each health insurance option wisely to choose the best plan for your circumstances. Some people prefer the autonomy provided by a fee-for-service plan, while others enjoy the low costs offered with a closed-panel HMO. If you want to see many specialists instead of primary care doctors, then a POS or PPO plan might be a better option. Also, keep in mind that the differences between these kinds of health insurance might blur because health insurers are competing for business.