Types of Health Insurance

• How much health coverage you will need
• The reasons why you’ll be accessing your healthcare providers
• Do you need to visit specialists often?
• Will you need X-Rays?
• Are you planning to grow your family soon?
• Is mental health covered?

In most situations, all of these examples are covered under health insurance, however, there may be a big price difference between how much healthcare plans pay and how much you pay for some of these services.

1. Health Maintenance Organization (HMO)

   An HMO plan offers healthcare services through a network of providers who agree to supply services to members. With an HMO, you’ll need to choose a primary care physician (PCP) or one will be chosen for you. Your PCP manages your care in that you’ll need to get a referral from them in order to see a specialist.

   Pros: A PCP that oversees and manages your care and typically lower costs for premiums and prescriptions.

   Cons: Extra cost to see a medical professional out of network and the inability to choose who you want to see as a specialist.

2. Preferred Provider Organization (PPO)

   A managed care organization of medical doctors, hospitals, and other health care providers who have agreed with an insurer or a third-party administrator to provide health care at reduced rates to the insurer’s or administrator’s clients. If you want greater flexibility or if you see a lot of specialists, PPO is a good choice.

   Pros: Choose any medical practitioner in network without prior approval and more flexibility.

   Cons: Higher monthly premiums and out-of-pocket costs and responsibility for managing your own care.

   HMO vs PPO: The Main Differences

   Both types of plans use a network of physicians, hospitals and other health care professionals to give you the highest quality care. The difference between the two is the way you interact with those networks. With an HMO plan, you pick one primary care physician. All your health care services go through that doctor. That means that you need a referral before you can see any other health care professional (except in an emergency). Visits to health care professionals outside of your network typically aren’t covered by your insurance. PPO plans give you flexibility. You don’t need a primary care physician. You can go to any health care professional you want without a referral—inside or outside of your network. Staying inside your network means smaller copays and full coverage. If you choose to go outside your network, you’ll have higher out-of-pocket costs, and not all services may be covered.

3. Point-of-Services Insurance (POS)

   A type of managed care plan that is a hybrid of HMO and PPO plans. Like an HMO, with Point-of-Services insurance, participants choose an in-network physician to be their primary care provider. But like a PPO, patients can go outside of the provider network for health care services. When patients go out of the network, they’ll have to pay most of the cost, unless the primary care provider has made a referral to the out-of-network provider.

   

4. Exclusive Provider Organization (EPO)

   A network of individual medical care providers, or groups of medical care providers, who have entered into written agreements with an insurer to provide healthcare to subscribers.

5. Health Savings Account (HSA)

   Although HSA’s are typically associated with an employer-sponsored health plan, individuals can open their own HSA if they meet the criteria. You must be enrolled in a HSA-qualified plan and you cannot be covered by Medicare, Medicaid, TRICARE or a spouse’s plan that doesn’t qualify. If you do qualify for an HSA, it’s definitely worth looking into since the benefits include deducting your contributions from your income tax, as well as using the account as a flexible savings account.

6. Indemnity Plan

   With this plan there’s no monthly premium and you are free to see whichever medical provider you wish at any time. Your insurer will pay a predetermined amount for what is labeled reasonable and customary charges and you’ll pay the rest. This type of plan can be quite expensive since medical bills can be fairly large and your insurer will only pay the agreed upon amount.

7. Employer Sponsored

   Many employers offer healthcare as an incentive to luring talented workers to their company. But more than that, under the ACA, any employer with 50 or more employees must offer healthcare that meets certain criteria regarding value and affordability. Smaller employers may offer their employees healthcare stipends or other programs to help them pay for insurance. For Californians who don’t get coverage through work, Covered California is the main marketplace to explore individual or family plans.