Health care insurance plans are an essential part of protecting your overall well-being. Without adequate coverage, you may be left with exorbitant medical bills, and not receive the care that you need. There are many different types of health care insurance plans available, each with its unique benefits and drawbacks. In this article, we’ll go over some of the most common health care insurance plans and break them down for you. We’ll also answer some frequently asked questions about health care insurance.
Types of Health Care Insurance Plans
There are several types of health care insurance plans available to choose from. The main types of health insurance plans are:
Type of Health Care Insurance Plan |
Description |
|---|---|
Health Maintenance Organization (HMO) |
This type of plan restricts you to using doctors and hospitals that are part of the HMO’s network. There usually are lower out-of-pocket costs with an HMO compared to other types of plans. |
Preferred Provider Organization (PPO) |
This type of plan allows you to visit any doctor or hospital you choose, but you’ll pay less if you use providers in the PPO’s network. You’ll typically have higher out-of-pocket costs than with an HMO, but you’ll also have more flexibility when it comes to choosing your healthcare providers. |
Exclusive Provider Organization (EPO) |
This type of plan is similar to an HMO in that you’re restricted to using providers in the EPO’s network. You usually won’t have to choose a primary care physician, and you may be able to see specialists without a referral. However, you’ll typically have higher out-of-pocket costs if you go outside of the EPO’s network. |
Point of Service (POS) |
This type of plan is a combination of an HMO and a PPO. You’ll choose a primary care physician who will coordinate your care, but you can see doctors outside of the POS’s network for a higher cost. |
High-Deductible Health Plan (HDHP) |
This type of plan typically has lower monthly premiums but higher out-of-pocket costs. You’ll need to meet a high deductible before the plan pays for any services. |
Health Maintenance Organization (HMO)
An HMO is a type of health care insurance plan that restricts you to using doctors and hospitals that are part of the HMO’s network. There usually are lower out-of-pocket costs with an HMO compared to other types of plans. You’ll typically have to choose a primary care physician who will coordinate your care and provide referrals to specialists if needed. Here are a few more things to know about HMOs:
- You won’t need to file insurance claims since the HMO will pay your healthcare providers directly.
- If you go outside of the HMO’s network for healthcare services, you’ll likely have to pay for them out of pocket.
- Some HMOs require you to live or work within a specific geographic area.
- If you have a chronic condition or need specialized care, an HMO may not be the best choice for you since your options will be limited to the HMO’s network.
Preferred Provider Organization (PPO)
A PPO is a type of health care insurance plan that allows you to visit any doctor or hospital you choose, but you’ll pay less if you use providers in the PPO’s network. You’ll typically have higher out-of-pocket costs than with an HMO, but you’ll also have more flexibility when it comes to choosing your healthcare providers. Here are a few more things to know about PPOs:
- You’ll likely have to file insurance claims yourself if you go outside of the PPO’s network.
- You’ll usually have to pay a co-payment for healthcare services, and the plan will pay the rest.
- If you have a chronic condition or need specialized care, a PPO may be a good choice for you since you have more choice in healthcare providers.
- If you use healthcare providers outside of the PPO’s network, you’ll typically pay more out of pocket.
Exclusive Provider Organization (EPO)
An EPO is a type of health care insurance plan that is similar to an HMO in that you’re restricted to using providers in the EPO’s network. You usually won’t have to choose a primary care physician, and you may be able to see specialists without a referral. Here are a few more things to know about EPOs:
- You’ll likely have to pay more out of pocket if you go outside of the EPO’s network for healthcare services.
- You won’t need to file insurance claims since the EPO will pay your healthcare providers directly.
- If you have a chronic condition or need specialized care, an EPO may not be the best choice for you since your options will be limited to the EPO’s network.
- Some EPOs require you to live or work within a specific geographic area.
Point of Service (POS)
A POS is a type of health care insurance plan that is a combination of an HMO and a PPO. You’ll choose a primary care physician who will coordinate your care, but you can see doctors outside of the POS’s network for a higher cost. Here are a few more things to know about POS plans:
- You’ll usually have to pay a co-payment for healthcare services, and the plan will pay the rest.
- You’ll need to file insurance claims if you go outside of the POS’s network for healthcare services.
- If you have a chronic condition or need specialized care, a POS may be a good choice for you since you have more choice in healthcare providers than with an HMO.
- Some POS plans require you to live or work within a specific geographic area.
High-Deductible Health Plan (HDHP)
An HDHP is a type of health care insurance plan that typically has lower monthly premiums but higher out-of-pocket costs. You’ll need to meet a high deductible before the plan pays for any services. Here are a few more things to know about HDHPs:
- You’ll usually have to pay for healthcare services out of pocket until you’ve met your deductible.
- Once you’ve met your deductible, the plan will begin paying for your healthcare services.
- If you have a chronic condition or need regular healthcare services, an HDHP may not be the best option for you since you’ll be responsible for paying for those services until you’ve met your deductible.
- HDHPs are often paired with a health savings account (HSA), which allows you to save money on a tax-free basis to pay for healthcare expenses.
Frequently Asked Questions
What is a co-payment?
A co-payment is a set amount of money that you’re required to pay for a healthcare service. Your insurance plan will pay the rest of the cost. For example, if you have a $20 co-payment for a doctor’s visit, you’ll pay $20, and your insurance plan will pay the rest of the cost of the visit.
What is a deductible?
A deductible is the amount of money that you’re required to pay for healthcare services before your insurance plan begins to pay for them. For example, if you have a $1,000 deductible, you’ll need to pay for the first $1,000 of healthcare services you receive before your insurance plan begins to pay for them.
What is a health savings account (HSA)?
A health savings account is a type of savings account that allows you to set aside money on a tax-free basis to pay for healthcare expenses. Money in an HSA can be used to pay for a wide range of healthcare expenses, including deductibles, co-payments, and prescriptions.
Do I need health care insurance?
While no one is required to have health care insurance, having coverage can help you access healthcare services when you need them and protect you from high medical bills. If you don’t have health care insurance, you may be responsible for paying the full cost of any healthcare services you receive, which can be expensive.
How do I choose the best health care insurance plan for me?
Choosing the best health care insurance plan for you will depend on your specific needs and budget. Consider factors like the cost of the plan, the size of the provider network, and the services covered by the plan when choosing a plan. It’s also a good idea to speak with an insurance broker or healthcare provider for guidance on choosing a plan.
Can I change my health care insurance plan?
Yes, you can change your health care insurance plan during the open enrollment period, which usually occurs once a year. You may also be able to change your plan outside of the open enrollment period if you experience a qualifying life event, like getting married or having a baby.
Conclusion
Health care insurance plans are an essential part of protecting your overall well-being. Whether you choose an HMO, PPO, EPO, POS, or HDHP, having coverage can help you access healthcare services when you need them and protect you from high medical bills. Consider your specific needs and budget when choosing a plan, and don’t hesitate to speak with an insurance broker or healthcare provider for guidance on choosing the right plan for you.