The Different Types of Health Insurance Explained

Throughout the United States, nearly 28 million people do not have health insurance. Are you one of them?

If you’re currently uninsured but are looking to change that, you likely have a lot of questions about types of insurance plans and what’s available to you. Read on to learn about the different types of health insurance so you can make an educated decision for yourself and your family.

Health Maintenance Organizations

A Health Maintenance Organization (or HMO) provides you with a list (or network) of doctors, hospitals, health care professionals, and health care facilities. You can choose any provider on the list to work with. You must also choose a primary care provider (or PCP) who is part of this network. 

Your PCP is responsible for coordinating all of your medical care. They will work with you for most health-related matters, but they will also provide you with referrals to see specialists who are part of your network. 

These types of health insurance plans are often less expensive than other health insurance options. The catch, though, is that you have to stay within your network. Depending on where you live or the access you to different doctors and doctors’ offices, this can be easier said than done.

Exclusive Provider Organizations

Similar to an HMO, an Exclusive Provider Organization (or EPO) provides you with a network of healthcare providers from which you can choose. Most EPO plans will not provide any coverage if you see a provider who’s outside of your network. Instead, you’ll be required to pay out of pocket for the full cost of your treatment, except in emergency situations.

EPOs vary with regard to primary care providers. Some require you to choose a PCP and others do not. In either case, when you have this type of plan, you don’t need PCP referrals to see a specialist.

Preferred Provider Organizations

A preferred provider organization (also known as a PPO) gives you a large network of providers and facilities to choose from. You can also opt to see providers who are outside of the network with some coverage, although the amount you pay out of pocket will be larger than if you had stayed in-network.

PPOs do not require you to choose a PCP. You can also see specialists without getting a referral.

Point-of-Service Plans

Point-of-Service or POS plans are a sort of hybrid between an HMO and a PPO plan.

As with an HMO, with a POS plan, your provider network will often be smaller. The costs of in-network care are usually lower as well. These plans require you to choose a PCP, too, and you must get a referral to see a specialist.

POS plans are more like PPOs, though, when it comes to seeing specialists outside of your network. You can choose to work with someone in or out of your network with a POS plan. However, your costs will be higher if you choose the out-of-network option, and you’ll have to file all claims yourself, which can be a major source of frustration for a lot of people.

What to Look for in an Insurance Plan

When it comes to figuring out how to choose health insurance, one of the most important things to consider is the type of insurance plan you want to purchase. There are other factors to take into account, though, including the following:

Budget

When you’re choosing between different plans, you have to keep your budget in mind. If you’re working with limited funds, a less expensive plan like an HMO might be a better fit for you.

However, it’s important to take the plan’s network into account, too, when you’re thinking about the cost of your health insurance. It’s not just the price of the plan that matters.

Let’s say you get an inexpensive plan but end up having to see specialists or other physicians who are outside of the network on a regular basis. If this is the case, you could end up spending a lot more money than you would if you had chosen a different type of plan with a more diverse network.

Deductible

Take note of the deductible for each plan, too. The term “deductible” refers to the amount of money that you have to pay yourself before your insurance provider takes over and starts paying.

If you get a plan with a high deductible, you can pay less per month for insurance. However, you also have to pay more out of pocket before your insurance kicks in. 

Current Health Status

A high-deductible plan might be worth it if you’re in good health and don’t have to go to the doctor very often. You can save money on your insurance premiums but will still have some coverage if you need it.

On the other hand, if you’re someone who has to go to the doctor frequently or someone who deals with chronic health issues, you might be better off choosing a plan with a lower deductible. This can help to make your healthcare costs a bit more predictable.

You Know the Different Types of Health Insurance: Now What?

As you can see, there are lots of different types of health insurance that you can choose from. Now that you know more about your options, do you know what kind of plan you want to purchase for yourself and your family?

Keep the list above in mind so you can make an educated decision. If you want to learn how to manage your health so you don’t have to spend as much money at the doctor’s office, be sure to check out some of the health and fitness articles on our blog, too.