Types of Health Insurance Plans: Find Your Options

Updated: November 9, 2022
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It is possible to choose from various health plans, whether you are an individual looking for coverage for yourself and your family or a business owner. Understanding the many types of health insurance plans available will help you select the best option that suits your coverage requirements and budget.

Summary
  • Health insurance is a form of insurance that assists in covering the surgical and medical expenses.
  • Various types of health insurance plans you should be aware of include:
1.      Health savings account (HSA)-eligible health plan
2.      Plan for a health maintenance organization (HMO)
3.      Exclusive service provider (EPO)
4.      Plan for point-of-sale (POS) systems
5.      Preferred provider organization (PPO) insurance coverage
6.      High Deductible Health Insurance (HDHP)
7.      Indemnity Plans
  • Most health insurance providers offer catastrophic, bronze, silver, gold, and platinum plans.
  • By understanding the various out-of-pocket fees involved with your plan, you can ensure that you receive the best deal possible, considering how you will use your plan and your overall healthcare requirements.
  • There is no single optimal form of health insurance. Each plan offers advantages and disadvantages, and the best plan depends on your health insurance needs.
  • Health insurance costs depend on various factors, including the type of plan selected and whether individual or family coverage is purchased. Additional variables, such as age and location, can alter the price.
  • Understand the Four Steps to Choose the Right Health Plan for You

What Is Health Insurance?

Health insurance is a form of insurance that assists in covering surgical and medical expenses.

The term “provider” is used by insurance companies to refer to a medical facility, practitioner, laboratory, or pharmacy that treats a patient.

The “insured” refers to the policyholder or insured individual.

What Are the 5 Types of Health Insurance?

Different types of health insurances plans are:

  • Health maintenance organization (HMO) plan
  • Exclusive provider organization (EPO)
  • Preferred provider organization (PPO) plan
  • Health savings account (HSA)-qualified plan
  • Point of service (POS) plan

Other types of plans include:

  • Indemnity plans
  • High Deductible Health Plan (HDHP)

Employers of any size can choose from various health insurance alternatives, including health reimbursement arrangements (HRAs) and employee stipends.

The best health insurance types depend on your and/or your employees’ wants, how much you’re willing to spend, and what medical expenditures you want to be covered. We’ll take a quick look at each type of insurance plan.

Types of Insurance Plans

Preferred Provider Organization plans (PPO)

PPO plans are similar to indemnity plans in which they give policyholders the freedom to see any doctor of their choosing. The PPO plan includes a group of pre-screened doctors and hospitals that have agreed to accept the plan’s discounted rates.

Your insurance company will cover less of the cost of your care when seeing an out-of-network doctor. On the other hand, patients with PPO plans can see specialists without first consulting with their primary care physician.

Health Maintenance Organization plans

Healthcare service providers that deal directly with insured patients. One’s primary care physician is frequently assigned as the care coordinator under the policy.

Most HMO plans only pay for care recommended by a primary care physician and have predetermined, low-cost per-service prices agreed with medical providers. Such a policy is typically the most affordable option.

Point-of-Service plans

POS plan is similar to a PPO and an HMO regarding how it handles medical care. All care can be coordinated through a primary care physician, or the insured can see a specialist outside the insurer’s network. The course of treatment is dependent on the sort of plan they have.

Exclusive provider organization (EPO) plans.

In the case of EPO plans, members are required to see in-network providers for all but urgent care. Members pay minor co-payments and maybe a deductible, and their primary care physician (PCP) refers them to specialists within the plan’s network.

You should consider whether or not an EPO would benefit your company if you:

Prefer the trade-off of fewer service options and lower prices.

Employ people who will benefit from working with a restricted set of service providers

Hire those willing to take on more financial risk in the event of unforeseen circumstances.

Health savings account (HSA)-qualified plans

An HSA-eligible HDHP can be used to save tax-free for medical expenses. Even if an employer doesn’t provide group health insurance, they can still contribute to an employee’s HSA, and the money stays with the person if they leave. HSA donations require an HDHP.

To an extent allowed by the IRS annually, HSA payments can be made before taxes. Unused HSA savings accumulate interest-free and carry over from year to year. If you are under the age 65, you will be subject to fines and interest if you take money from your 401(k) for anything other than a qualified medical expense.

Indemnity, or Fee-for-Service, Plans

The insured person is free to select his or her healthcare provider of choice under a Fee-for-Service plan. Under an indemnity plan, the insurer typically covers 80% of expenses, and the policyholder will be responsible for the remaining 20% through a coinsurance system.

High Deductible Health Plan (HDHP)

Individual HDHP deductibles are $1,400 and $2,800 in 2022. HDHPs are HMOs or PPOs. If you don’t need expensive medical treatment, an HDHP may have reduced monthly premiums. Even if you do, you should determine whether or not the higher premiums are justified by the risk of paying the deductible in full.

A health savings account is frequently used with high-deductible health insurance (HSA). To pay the high deductible health plan (HDHP) deductible and other approved medical expenses, an HSA can be used. Your Health Savings Account balance will carry over from year to year, giving you the potential to save up a substantial amount to go against future medical expenses.

Health Insurance Metal Categories: Bronze, Silver, Gold, Platinum

Catastrophic, bronze, silver, gold, and platinum policies are typical offerings from insurance providers.

Imagine becoming unprotected because of a change in employment, a new partner, or any other life circumstance. Don’t freak out if you don’t have health insurance; learn about your options. Your needs can be satisfied by choosing a health insurance plan anywhere from bronze to platinum (or one of the metals in between). Then, you can save money on monthly premiums while still having access to coverage if an emergency arises. Keep reading to learn more about the metal plan’s tiers.

 Bronze Plan

You can get the treatment you need at a reasonable price with a bronze health insurance plan. If you’re healthy, these policies may provide reduced premiums. You’ll have to pay a bronze premium for medical care and medication when compared to those who don’t use bronze. Because of the greater deductible, you may incur greater out-of-pocket expenses. A bronze plan might be the least expensive choice among the available insurance packages. The cost could increase, though, if you need to fill many prescriptions or make frequent trips to the doctor.

Silver Plan

The silver plan is the other form of health insurance coverage available. To reduce the out-of-pocket costs of routine medical attention, a silver plan may provide more coverage than a bronze plan. Nevertheless, you can anticipate paying a higher premium because of the added security. The Silver plan is a solid compromise between low premiums and low deductibles and is less expensive than some metal levels. You can also utilize them to cover the basics regarding insurance. You’ll have to pay for some of your treatment, but you could save money compared to other metals.

Golden Plan

When it comes to health insurance, gold plans are among the finest options for those who already have preexisting diseases. The premiums for these plans are higher than those of silver and bronze, but the deductibles are lower. Even with a larger premium, the cost of care each month is more predictable. You’ll be able to pay your premium without worrying about your deductible until later in the year. To put it another way, the annual cost of care will be cheaper than it would be in the lower metal tiers. Paying a little more each month can be worthwhile if you anticipate needing a lot of routine treatment.

Platinum Plan

Platinum is the highest level of health insurance available, and platinum plans are very different from bronze plans. The premium for a platinum insurance plan is more, but the deductible is much smaller. Platinum plans may seem the most expensive option if you merely look at the premiums.

On the other hand, the greater premium may be justified by the decreased deductible. You may have already met your deductible for the year by the time January rolls around. You can receive as much in-network treatment as you need for the remainder of the year without incurring additional expenses.

4 Out-of-Pocket Health Care Costs You Should Know

Remember that the most expensive health insurance plan is not always the best for you. Your healthcare needs and how you intend to use your plan’s services should inform your evaluation of the plan’s various out-of-pocket expenditures.

Monthly Premiums

A monthly health plan premium is required to maintain your health insurance coverage. No of how often or rarely you utilize medical care, you’ll still be responsible for the same monthly payment.

When it comes to medical coverage, many workers are fortunate enough to have their employers cover a sizable chunk of their premium costs through an employer-sponsored health insurance plan. Health insurance enrollees in employer-sponsored plans who are eligible for cost-sharing reductions can save a large amount of money each month by selecting a higher-premium health plan.

Deductibles

For medical care, you will be responsible for an out-of-pocket expense known as the deductible before your insurance will begin to pay for anything.

Even if you haven’t hit your health insurance deductible yet, many health insurance plans still pay for routine procedures like annual physicals.

High-deductible plans are more suitable for people who do not anticipate regular healthcare use.

Copays

The term “copay” refers to the predetermined amount of money patients must pay when receiving routine medical care, such as filling a prescription or seeing their primary care physician. Copays are due whether or not you’ve met your deductible, and they often do not count toward it.

Coinsurance

Your health care expenses will be split 50/50 between you and your insurance company under a coinsurance arrangement. If a service costs $4,000 and your coinsurance rate is 20%, you will be responsible for paying $800, and your insurance company will cover the remaining $3,200.

After you’ve met your deductible, your coinsurance payments will begin.

Which type of health insurance is ideal?

There is no single optimal type of medical insurance. Each plan offers advantages and disadvantages, and the best plan depends on your health insurance needs.

Comparing and contrasting the various insurance plan types will help you choose which benefit structure makes the most sense.

Comparing PPOs vs. HMOs

  • PPO premiums are typically greater than HMO premiums.
  • PPOs provide more access to physicians and hospitals than HMOs.
  • PPOs do not require a referral to a specialist, whereas HMOs do.
  • HMOs, exclude the majority of out-of-network treatment, whereas PPOs cover a part of out-of-network expenditures.

Comparing a PPO vs. EPO

  • EPO plans typically offer cheaper monthly premiums than PPO policies.
  • EPO plans often do not cover out-of-network treatment, whereas PPO policies cover a part of these costs.
  • EPO policies limit your access to more physicians and hospitals than PPO plans.

Comparing PPOs and POSs

  • PPO and POS plans permit you to seek treatment outside your network, but you will likely pay more for that care than staying within your network.
  • To see a specialist, a reference is not needed with a PPO plan. A point-of-sale system, however, very certainly does.
  • A POS plan’s premiums will generally be lower than a PPO plan.

Comparing an HMO vs. EPO

  • Typically, HMOs have lower premiums than EPOs.
  • Neither HMOs nor EPOs cover the majority of non-network services.
  • EPOs do not require a referral to see a specialist, whereas HMOs do.
  • EPOs negotiate cheaper rates with in-network providers, whereas HMOs have either employed or contracted providers.

Comparing HMOs and POSs

  • POS plan members can seek out-of-network treatment. However, HMO members are typically not covered for out-of-network care.
  • To see a specialist, referrals are required by both POS plans and HMOs.
  • HMOs and POS plans typically have cheaper premiums than PPOs.

Comparing an EPO vs. POS

  • A POS may provide coverage for care outside the network, although an EPO typically does not.
  • To see a specialist, EPOs are unlikely to require a reference, whereas POS plans will have this necessity.
  • EPOs and POS plans typically have lower premiums than PPOs.

Average Health Insurance Cost

The cost of health insurance varies greatly from individual to person and family to family. Age and location are two other variables that can impact the final price.

Medical coverage price includes regular monthly premiums and incidental expenses incurred when receiving care (like deductibles, copayments, and co-insurance). Sometimes, you won’t know the exact amount until you know the full cost from the source.

The monthly premium is a good starting point for cost estimation of health insurance. The following categories of private marketplace plans have significantly different average monthly premiums:

  • POS: $534
  • HMO: $427
  • EPO: $508
  • PPO: $517

The monthly premium is important but only a fraction of the total expense. The total cost of health insurance can be affected by deductibles, copayments, and co-insurance, all of which are more difficult to estimate.

You can use a calculator on certain health insurance exchange websites to see how much money you might save or spend on a particular health plan, depending on how often you get sick.

Four Steps to Choosing the Right Health Insurance for You

  1. Pick on types of health planning, such as a high-deductible health insurance policy (HDHP), preferred provider organization (PPO), health maintenance organization (HMO), exclusive provider organization (EPO), or another option. Consider your freedom to select healthcare providers and deductibles before settling on a plan.
  2. Choose between Bronze, Silver, Gold, and Platinum if you want to buy your plan through the Marketplace on healthcare.gov. The bronze plan provides the least coverage for the lowest price, while the platinum plan provides the greatest coverage for the highest cost. Outside of the Marketplace, employer-sponsored plans typically provide their own sets of coverage options.
  3. Examine the monthly premiums, deductibles, copays, and coinsurance rates to ensure you’re receiving the greatest bargain on the coverage you anticipate needing once you have a rough concept of what your perfect health insurance plan would look like.
  4. Get a membership and make a purchase. You can join a Marketplace plan year-round, not just during Open and Special Enrollment Periods. There are varying time limits for enrolling in employer-sponsored policies.

To sum up, the significance of health insurance cannot be overemphasized. You should quickly choose a good health insurance plan that covers you, your spouse, your kids, and your parents.

Reach out Today at NewHealthInsurance, and get affordable health insurance plans now!

FAQS

What is health insurance?

A health insurance policy offers coverage for the insured’s medical and surgical expenses in the event of a medical emergency. However, you must pay a premium to obtain health insurance coverage.

Why should I purchase health insurance?

You should acquire health insurance to not deplete your life savings to pay for emergency medical expenses.

How will my health insurance cover my unexpected medical expenses?

If you have elected the cashless option, your health insurance will pay your hospital bills directly; otherwise, it will reimburse you for any out-of-pocket medical expenses incurred due to an illness or injury.

What is the minimum age to purchase health insurance?

While the eligibility age for health insurance coverage varies, the usual range for adults is between 18 and 65 years old. Children are eligible between the ages of 90 days and 18 years.

Will my health insurance permit me to cover my family?

Yes! If your plan permits, you can obtain coverage for yourself, your spouse, your children, your dependent parents, and various other relationships such as in-laws, siblings, and others.

Will I be permitted to purchase multiple health insurance plans?

Yes, you may choose a different plan based on your unique medical requirements.

Can I make payments on my health insurance premium?

In most cases, the health insurance premium is paid annually. However, you may also pay your subscription in monthly, quarterly, or semiannual installments.

What are the standard coverage benefits provided by my health insurance?

Health insurance policies vary in their coverage benefits. However, basic health insurance features include coverage for inpatient hospitalization, pre- and post-hospitalization, childcare operations, emergency ambulance costs, organ donor costs, domiciliary hospitalization, OPD fees, and more.

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