Are you looking for health insurance? Trying to decide which types of medical insurance is best for your health preferences and your budget? Wondering the difference between a PPO and an HMO plan? You may have other questions.
Medical care is a necessity for everyone–whether you’re a one-year-old or hitting 100. Medical services can cost a fortune. For this reason, we can purchase a health insurance policy. But there are so many options to choose from.
And reading the entire booklets for each type can be daunting. That’s why we’ll break it down for you.
In this guide, you’ll learn the different types of health insurance available and their differences. Here’s what you need to know about the different types of health insurance.
Table of Contents
- Health Insurance At a Glance
- Consolidated Omnibus Budget Reconciliation Act Cobra Insurance (COBRA)
- Preferred Provider Organizations (PPO)
- Health Maintenance Organization (HMO)
- Exclusive Provider Organization (EPO)
- Point-of-Service Plan (POS)
- High Deductible Health Plan (HDHP)
- Which Plan Is Right for You? Types of Health Insurance Reviewed
Health Insurance At a Glance
When you look for health insurance you have options. You can buy a policy from a health insurance broker. Or you can purchase a plan from the government’s Marketplace.
Providers organize health insurance plans in tiers:
Platinum policies offer the most coverage. You’ll pay the least percentage. Bronze offers the least coverage and you’ll pay a higher percentage.
Catastrophic typically covers preventative care for no charge. And it the first three visits.
This insurance tier goes into effect after you’ve paid a high deductible. However, the details of each tier may vary across the different types of health insurance we’ll discuss.
Consolidated Omnibus Budget Reconciliation Act Cobra Insurance (COBRA)
COBRA is temporary health insurance for people who have lost their health benefits. For example, after a layoff, an employee’s health insurance plan ends.
COBRA will kick in for a limited period of time as long as the employee meets certain criteria. If you’ve experienced a recent layoff, you may have COBRA health insurance questions.
Preferred Provider Organizations (PPO)
Another type of health insurance is called Preferred provider organizations or PPO. This kind of insurance has a network of providers. These doctors and healthcare professionals offer a discount to members in that network.
Policyholders see these providers. When you need to see a specialist, you don’t need a referral from your primary care provider. You may also visit a provider outside the network with a PPO plan. However, it will cost you a lot more in copayments.
Health Maintenance Organization (HMO)
An HMO provides health services through a special network of providers. This insurance plan pays doctors and medical professionals the least amount of money.
Because of this, health care providers don’t like to accept patients with HMOs.With an HMO, you’ll also have less freedom than other health insurance plans to select health care providers.
And a primary care doctor must provide you with a referral for every specialist you wish to see. Although there are a few HMO policies that don’t require referrals to see a specialist, most of them do.
Exclusive Provider Organization (EPO)
When you carry an EPO plan you may have some freedom to choose providers, certainly more than you would if you had an HMO insurance plan. Also, when you see a specialist, you don’t need a referral from your primary care physician.
The bad news: unlike a PPO, you must stay in your network or you won’t be covered. This means you’ll need to pay 100% of the doctor bill with no reimbursement.
The only exception is when you have an emergency. The good think about an EPO: your premium will be lower than a PPO provided by the same insurance company.
Some EPOs require deductibles before they kick in. But not all of them require you to pay a deductible so check around before you decide on a plan. With an EPO, you’ll need to pay a small copayment.
Point-of-Service Plan (POS)
A POS plan is a mix between an HMO and a PPO. POS plans offer more freedom than HMO plans. And you have more choices of medical providers.
You may see a specialist outside your network, unlike an HMO, which won’t let you see anyone outside the network. But keep in mind, you’ll pay a higher cost for seeing an out-of-network provider. And you’ll need to complete extra paperwork.
When you use a POS plan, your primary care physician must arrange your referrals with a specialist. You can’t just pick up the phone and make an appointment to see a specialist without a referral. You may also pay a deductible and a copayment.
High Deductible Health Plan (HDHP)
An HDHP may be coupled with a health savings account (HSA). An HSA may be provided by your employer, depending on your company’s health benefits.
For an HSA, you may contribute pre-tax dollars to cover additional costs your insurance doesn’t pay for. This may include your coinsurance, copayments, and other types of insurance such as dental insurance not covered. But keep in mind, not every HDHP may be combined with an HSA.
You may also combine your HDHP with an HRA, a health reimbursement arrangement plan. With an HRA, the employer contributes to the account, rather than the employee.
Which Plan Is Right for You? Types of Health Insurance Reviewed
These are the types of health insurance plan you may choose when you’re looking for insurance. We hope that the information in our guide has helped you make a better-informed choice about the best health insurance plan for you and your family.
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