Types of Health Insurance: Your Ultimate Guide

Updated: September 15, 2023
types of health insurance

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.

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 insurance 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 your employees’ wants, how much you’re willing to spend, and what medical expenditures you want 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 giving policyholders the freedom to see any doctor. 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

A POS plan is similar to a PPO and an HMO regarding handling 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 must see in-network providers for all but urgent care. Members pay minor copayments 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:

I 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 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 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 their 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 selecting a plan anywhere from bronze to platinum (or one of the metals in between). Then, you can save money on monthly premiums while accessing 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 more extraordinary 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 more significant bonus, 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. Put another way, the annual cost of care will be cheaper than 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 differ significantly from bronze plans. A platinum insurance plan premium is more, but the deductible is much smaller. Platinum plans are the most expensive option for the bonuses.

On the other hand, the more significant 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 only sometimes 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 premium is required to maintain your health insurance coverage. No matter 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 still need to hit your deductible, many health insurance plans still pay for routine procedures like annual physicals.

High-deductible plans are more suitable for people not anticipating 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 are many optimal types of medical insurance. Each plan offers advantages and disadvantages; the best strategy 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 most 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.
  • A reference with a PPO plan is optional to see a specialist. 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.
  • Unlike HMOs, EPOs do not require a referral to see a specialist.
  • 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 usually have lower premiums than PPOs.

Average Health Insurance Cost

Health insurance costs vary significantly 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 coinsurance). Sometimes, you will know the exact amount once you know the total 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 significant but only a fraction of the total expense. The total cost of health insurance can be affected by deductibles, copayments, and coinsurance, 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 one type 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 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 most fantastic range for the highest cost. Outside of the Marketplace, employer-sponsored programs typically offer their own sets of coverage options.
  3. Examine the monthly premiums, deductibles, copays, and coinsurance rates to ensure you’re receiving the most fantastic 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 must be considered. It would help if you quickly chose 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?

It would be best if you acquired health insurance so as not to 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. 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, children, dependent parents, and other relationships such as in-laws, siblings, and others.

Will I be permitted to purchase multiple health insurance plans?

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.

In conclusion, armed with this knowledge, you’re ready to take the next step towards securing your health. To get free quotes and find the perfect health insurance plan for you, visit www.newhealthinsurance.com today!

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