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Types of Health Insurance

Find the health insurance plan that’s right for you

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What is Health Insurance and Why Do I Need Health Coverage?

Different types of health insurance plans meet different needs. When you compare options, it’s important to understand how they are structured, so you can choose the kind of plan that best meets your needs and budget. The Affordable Care Act (ACA), known as Obamacare, changed up the health landscape quite dramatically (see below).

A health policy is an agreement between you and an insurer that when you need medical, dental, vision and a variety of other types of medical treatment, your carrier will help you pay for your care in exchange for a premium. Unfortunately, medical treatment is typically not free, although there are some free health insurance and low-cost programs, like Medicaid, for people who meet income guidelines. Most people cannot afford to pay for healthcare on their own. With a health policy, you pay your insurer a premium and they help you pay for your healthcare. Choosing the best type of plan depends on your unique situation. Answering some key questions can help make health choices clearer.

Doctor explaining Asian American family about health insurance

What Type of Health Coverage Do I Need?

It depends on your age, your health and your financial situation. Typically, young people and children need less healthcare than seniors. Chronic diseases, such as diabetes, must be taken into consideration. Children can run through a host of diseases and infections that strike in those years, plus they need vaccinations.

Health plans run the gamut from catastrophic (very low premium and only used in the event of a catastrophic injury or disease) to a gold standard (high monthly premium but offers everything you need and want) and a multitude of plans in between.

Plans are also available in different formats, such as HMO, PPO and more. What is this alphabet soup and what does it mean? Keep reading to find out more.

You can see why it’s important to get your ducks in a row before even looking for a plan.

How Much Do Health Plans Cost?

Your financial health is a deciding factor. If you are young and in the prime of your life with no chronic conditions, you can get away with paying less for your coverage. Those who need more care will need to choose a health plan that gives them plenty of access to medical care without a huge premium.

There is some help available for those who meet certain income guidelines.

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What Does a Health Plan Cover?

When choosing the right type of health coverage, you need to consider:

  • 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.

Which Types of Doctors and Hospitals Are in the Health Marketplace Plans?

If you are like many people, you have an established medical community that you access when necessary. It’s hard to suddenly switch from your main doctor to someone completely new. Unfortunately, that can happen when you change health plans or companies. So, before signing on the dotted line, make sure you can live with the medical providers you’ll be accessing if you want the discounted (in network) price. We’ll talk a little more about this later.

What Are the Most Common Types of Health Insurance Plans?

Since we’re all different and we all have different healthcare needs, health plans come in a variety of shapes and sizes. You may end up in an HMO or PPO through no decision on your part (such as an employer-sponsored program), but in other cases, you can choose which one suits you best.

Doctor explaining diagnosis to male patient in tablet

  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.

    Family of man, woman and son walking with doctor female inside hospital

  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.

Are There Other Types of Health Coverage?

Yes, there are government-sponsored options for people who meet eligibility requirements.

Medicare: Medicare is provided by the government and is for those who are 65 and older, have certain disabilities and meet other eligibility guidelines.

Medicaid: Medicaid provides health coverage to people who meet eligibility requirements set by the state where they reside. Medicaid may be used for income-eligible groups, as well as for immigrants and pregnant women and some disabilities.

CHIP: The Children’s Health Insurance Program (CHIP) provides healthcare to children whose parents make too much money to qualify for Medicaid but who don’t make enough money to purchase private healthcare.

Ready to Find Affordable Health Coverage Today?

Get the peace of mind that comes with knowing you’re protected if you become sick or injured by signing up for a health plan through Freeway Insurance. We can help you find an affordable health care plan that fits your needs and budget – and eliminate the confusion. Get a free health insurance quote online today or give us a call at 877-583-1475.

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