Worried about rising medical costs? Don’t know which plan is right for you? Learn more, and make an informed decision.
Health insurance is a type of coverage that helps pay for medical and health-related costs. It may include medical, vision, drug, and dental expenses. It can also cover mental health services, rehabilitation, preventive care, and long-term care, depending on the plan.
There are 5 types of health insurance plans:
- EPOs are Exclusive provider organizations.
- Health Maintenance Organizations (HMOs) require members to use doctors within the network.
- Point-of-Service (POS) plans to let members go outside the network for non-emergency services.
- High Deductible Health Plans (HDHPs) have lower premiums but higher out-of-pocket costs.
- Preferred Provider Organizations (PPOs) offer traditional approaches between HMOs and POs.
HDHPs need deposits in tax-sheltered savings accounts before accessing care. PPOs provide incentives for policyholders, like lower co-payments with certain recommended professionals in hospitals, physicians’ offices, and community-based organizations. This helps maximize benefits for patients and follows federal government guidelines.
Health Maintenance Organizations (HMOs)
Health Maintenance Organizations (HMOs) offer comprehensive medical coverage to members. A PCP coordinates all healthcare needs including specialist referrals. HMOs are one of five health insurance plans available.
Exclusive Provider Organizations (EPOs)
Exclusive Provider Organizations (EPOs) offer health plan networks that only allow members to access doctors, medical staff, and hospitals within their network. In exchange for this, members get a lower-cost plan. EPOs usually need members to get a referral from their primary care doctor first before seeing a specialist.
These plans have several features, such as:
- Lower premiums than traditional plans, by providing access to fewer providers
- Deductibles and coinsurance change depending on the provider or service
- Prior authorization is needed for some services like hospitalization
- Usually, no coverage for out-of-network care, except in emergency cases when out of the service area
- Tiers of co-payments for generic versus name-brand drugs
Point-Of-Service (POS) Plans
A Point-Of-Service (POS) plan offers a bunch of options for how and where you get care. You can select providers within the plan’s network, or outside the network – though it may cost more.
For this plan, you pick a primary care physician who takes charge of your health care services. When needed, they refer you to specialists.
Many POS plans bring together features of HMO plans and PPO plans by offering access to out-of-network providers – but there may be financial penalties if you use them.
Generally, POS plans to provide quality healthcare at a lower cost than PPOs or indemnity plans – plus the flexibility of PPOs.
Preferred Provider Organizations (PPOs)
PPOs, one of five health insurance plans, give greater flexibility than traditional plans. With PPOs, members can choose both in-network and out-of-network health providers, with a higher fee. Low deductibles, co-payments, coinsurance, and an emphasis on preventative care are included in PPO plans. Even though, they usually have higher monthly premiums than other plan types.
High-deductible Health Plans (HDHPs)
High-deductible health plans (HDHPs) are a type of insurance with lower premiums and higher deductibles paid for most services. A deductible is an amount you must pay before your plan starts to cover the rest. HDHPs often go with tax-advantaged savings like HSAs and HRAs.
These plans let you customize benefits to your needs. Common features include first-dollar coverage of preventive care, copays, coinsurance, and maximum out-of-pocket limits. Self-employed people who buy HDHPs may be eligible for federal tax benefits like premium rebate credits and deductions.
HDHPs may be a good option for saving money on premiums and still getting quality coverage for unexpected medical expenses. Consider all pros and cons before choosing any health plan since there is no single healthcare solution that fits everyone.
Health savings accounts (HSAs)
HSAs are for individuals with high-deductible insurance plans. Pre-tax dollars can be saved in HSAs for medical and dental bills. Contributions are tax-deductible. The funds in an HSA grow tax-free until they are used.
People can save or spend their money as they please, no approval is needed. HSAs remain available when someone changes jobs or moves. This way, they can be prepared for a medical emergency.
There are many health insurance plans. First, review them to find the best one for you, your family, or your business. When making a decision, consider:
- Coverage levels
- Possible provider network restrictions
- Other benefits
It may be helpful to work with an experienced agent or broker to explore coverage from local carriers. Understand and compare the options to get the best coverage for your individual needs.