Having health insurance can save you from financial ruin. Without a form of health coverage, you will be left paying for high medical costs out of your own money. Even though there are still out-of-pocket costs that you need to handle, it’s still more advantageous than not having coverage at all. Before deciding what health insurance to obtain, though, it’s important to understand the health insurance types.
What are the Health Insurance Types?
There are four main types of health insurance. These are the following:
Health Maintenance Organizations (HMOs)
HMO has a local network of doctors, hospitals, and health care professionals that you need to go to obtain discounted prices. With HMO, you have to work with your primary care provider (PCP) for your healthcare. You need the referral of your PCP before you can see a specialist.
Although this type of health insurance can be quite restrictive, the cost is typically lower than other types of health plans. However, you can only enjoy the low cost if you stay in-network.
Preferred Provider Organizations (PPOs)
It has a huge network of providers. In that case, it has plenty of providers that you can choose from. This type of health insurance also lets you see a provider outside of the plan’s network. However, the out-of-pocket cost can be higher than HMOs.
Unlike HMO, PPO doesn’t require you to go to a primary care physician to get a referral before you can see a specialist.
Exclusive Provider Organisations (EPOs)
It still has a network of providers that you can choose from. Many EPO plans don’t have coverage for out-of-network care, except during an emergency. If you go to a provider that doesn’t belong to the plan’s local network, you are likely to pay the full medical cost.
You may or may not need to see a primary care physician before you can go to a specialist for consultation. If your plan doesn’t require it, you can see a specialist without a referral.
Point of Service (POS)
It combines the features of HMO and PPO plans. When it comes to its provider network, it’s smaller than a PPO plan. The overall costs are lower if you go to an in-network care. POS plans require that you pick a primary care provider (PCP) from the plan’s network of doctors. You will see your PCP for medical care and avid.
You need to obtain a referral if you see a specialist. Just like a PPO, you can choose specialists who are in-network or out-of-network. If you go to a provider outside of your plan’s network, the cost is higher and you handle any insurance claims yourself.
Indemnity Health Insurance
Also known as a fee-for-service plan, this type of insurance has pre-determined amounts of costs paid to you for covered services. You will pay for deductibles and co-insurance amounts.
This is a good option for your business, especially if you have employees who require flexibility for doctors and hospitals.
Health Savings Account (HSA)
It’s a tax-favored savings account that you can use together with an HSA-compatible health plan. HSA can be attached to a group health insurance. But it is owned by employees.
This is ideal if you can’t afford to offer a group health insurance policy. It’s also a suitable plan if you want control over how much you can contribute to health benefits.
Which is Better HMO or PPO?
These two are the most common types of health insurance. Even though there are many types of health insurance, health insurers offer these two plans. So, which plan is ideal for you?
If you want lower cost, HMO is the more ideal plan. However, if you want flexibility because you travel often, then the PPO plan is suitable.
What Type of Health Insurance is Ideal for You?
The only way you can find the best insurance for your situation is to talk to your doctor. Your physician knows your current health status and he/she can advise you what inclusions you need in health insurance.
Typically, you need health insurance with higher premiums if you’re not in good health or you often visit a doctor. However, if you’re healthy, you could save money by opting for coverage with higher deductibles but with lower monthly premiums.
If you expect more than just preventive care, plans with lower deductibles and coinsurance are ideal.
You should work with a health insurance broker or an expert who can help you find the most suitable coverage. Remember that the wrong type of insurance can cost you more.
There are several health insurance types. But the most common ones are PPO and HMO. If you wish to know more about health insurance, please check out these pages: