Understanding Different Types of Health Insurance

Introduction

If you are thinking about the future, or you have health problems now, then your best bet is health insurance. You can afford healthcare without handling the finances on your own. It might seem too good to be true, but it is not. Over 92% of the American population have health insurance and they have it right. Health insurance is an essential aspect of your life. You might need to pay a fee for health insurance, but it is nothing compared to medical expenses. This article will tell you all about the different types of health insurance and how to find the right one for you.

All About Health Insurance

Health insurance is an agreement between you and a health insurance agency. The agreement consists of an obligation from the insurance agency to pay for partial or complete costs of your healthcare expenses. In return, you will need to pay a premium for the healthcare service. Generally, health insurance covers different aspects of medical expenses. This includes: medical insurance, surgical insurance, prescribed medication coverage, and additional benefits. (It depends on the type of health insurance you choose, which will determine the coverage you will receive.)

There are two ways that health insurance operates. The first method is paying you the money that you spent on healthcare, as compensation. As for the second method, the health insurance agency pays the healthcare provider directly. You might find that a key incentive for employees is the inclusion of health insurance in the employer benefit package. (Kagan)

What Are the Different Types of Health Insurance?

There are four different types of health insurance networks that you can choose from.  Health insurance networks are a group of physicians, facilities, and healthcare providers that agreed to partner up with a healthcare plan. This allows health insurance recipients to access different medical services at a reduced cost, due to negotiations with the providers and the insurance agency. The different types of health insurance are: Health Maintenance Organizations (HMOs), Exclusive Provider Organizations (EPOs), Point-of-Service (POS) Plans, and Preferred Provider Organizations (PPOs). We are going to compare each plan for you and help you figure out which is the right health insurance plan for you. (Cigna)

Health Maintenance Organizations (HMOs)

Health Maintenance Organizations (HMOs) is a healthcare plan that gives you access to local doctors, facilities, and healthcare providers; you need to choose from them. Also, you will need to choose a primary physician, or Primary Care Provider (PCP), from the local network. Your primary physician is basically your new best friend. They will remain dedicated to your health, maybe almost as much as you are. In case you reach a speed bump with your health, your Primary Care Provider is responsible for providing referrals for you within the local network of health insurance plans. Typically, the HMOs health insurance plan costs less than all of the other health insurance plans. But, you will need to remain within the local network of healthcare providers and facilities.

Exclusive Provider Organizations (EPOs)

With an Exclusive Provider Organizations (EPOs) health insurance plan, you can choose from a network of healthcare providers who are participating in the plan. Most of these health insurance plans do not cover healthcare from providers outside of the network, with the exception of health emergencies. If you face a health emergency and visit a healthcare facility or provider that is outside your network, you might not have to pay for the full cost of medical expenses. It depends on your health insurance plan, but you may have to choose a primary physician, Primary Care Provider (PCP).  Unlike the HMOs health insurance plan, you do not need a referral from your primary physician to visit a specialist. You just have to make sure that the specialist participates in your health insurance plan.

Preferred Provider Organizations (PPOs)

For Preferred Provider Organizations (PPOs) health insurance plans, you will find that there is a large network of healthcare facilities and providers that you can choose from. (The larger the network, the more options for you to choose from.) You can also visit healthcare providers from outside your health insurance plan, but you should expect that you will pay more out of your own pocket. With PPOs health insurance plans, you do not need to choose a primary physician or Primary Care Provider (PCP). You can visit specialists for consultations without a referral. Keep in mind that if you see a physician outside of your plan’s network, then you will pay high out-of-pocket costs.

Point-of-Service (POS) Plans

Point of Service (POS) plans are a combination of Health Maintenance Organizations (HMOs) plans and Preferred Provider Organizations (PPOs) plans. This plan has a network of healthcare providers that is smaller than a PPOs plan network. But, the costs for healthcare from providers within the network are cheaper, similar to the HMOs plan. Also, you will need to choose a primary physician, or Primary Care Provider (PCP), from the local network. They will remain dedicated to your health, maybe almost as much as you are. In case you reach a speed bump with your health, your Primary Care Provider is responsible for providing referrals for you within the local network of health insurance plans. If you decide to see a doctor outside the plan’s network, then you will have to pay higher out-of-pocket costs and you will be responsible for filing all claims.

Which Type of Health Insurance is Best For You

You might not know what health insurance plan that will fit your situation best. There are just too many to choose from, right? No matter how hard you try, you will find yourself in a whirlwind of premium fees and deductibles. If this applies to you, then you should consult your healthcare provider and they might help you out. In the case that you already have a primary physician, then you can always follow them to their health insurance plan. (That way you guarantee their consultation; you just do not have to pay as much.) Additionally, you should consider your location and the location of the plan’s network of providers.

When Might You Need Health Insurance

You might not know when you will need health insurance, but there is a trick to knowing when you need health insurance and what kind. If you are fortunate enough to be in good health and you do not need to visit a doctor so much, then you should consider health insurance with lower premiums. Lower premium health insurance plans that have higher deductibles will help you save a chunk of change. On the other hand, if you need more than preventive services, then you should consider lower deductible health insurance plans so that the costs will remain realistic for your share. Since you might pay the partial cost of the medical expenses, you should be aware of your deductibles.

In addition, you should compare the health insurance plan to your current health state and the diagnosis you received from your physician. (Health insurance is a good idea, but you just need to figure out which one you want.)

Works Cited

Cigna. Types of Health Insurance. 07 2018. 14 09 2021 <https://www.cigna.com/individuals-families/understanding-insurance/types-of-health-insurance>.

Kagan, Julia. Health Insurance. 05 03 2021. 14 09 2021 <https://www.investopedia.com/terms/h/healthinsurance.asp#what-is-health-insurance-and-why-do-you-need-it>.

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