Types of Health Insurance

There are five types of health insurance. HMOs, EPOs, POS, and PPOs. Each type offers different services depending on its’ structure and affiliations. For example, HMO means Health Maintenance Organizations. EPO means Exclusive Provider Organizations. PPO means Preferred Provider Organizations, and POS means Point of Service Plans. HMOs offer health insurance through a network of healthcare providers and their affiliated facilities. With an HMO, there’s a chance you will have less freedom to choose who your health care provider is. In addition, there will be less paperwork involved. However, with an HMO, every time you need a particular service, such as an MRI, Mammogram or you need to see a specialist, such as an orthopedic doctor, your primary doctor will have to write you a referral, which takes longer since it has to be authorized by the HMO plan. However, within an HMO, you can see any doctor you choose as long as they’re part of the same HMO network. This is called being an in-network doctor.

If you decide to see someone outside your HMO plan, that’s called out-of-network, and you may be forced to pay in full for whatever services you seek. The premium is what you will pay each month for your health insurance. The deductible will be the amount you’re responsible for before your insurance begins. This can be a small amount or a large one. Copays or co-insurance are the fees you pay at each doctor or facility visit. Some are as low as $5. In some instances, you will pay a percentage of the bill, such as 20%, and the provider will pay the remaining 80%.

These fees all go toward your deductible. If you have an EPO, you have more freedom to choose the doctor you want and the facility, such as the hospital you want to be affiliated with. With an EPO, you don’t have to wait to get a referral to see a specialist or to have a particular service, such as a CAT Scan. However, if you go out of network, you will have to pay for everything. In addition, your premium or monthly fee will be lower than  PPO. With a POS, you get the best of both worlds by combining an HMO and  PPO. As with an EPO, you get more freedom to choose your doctors with a POS. There’s a little more paperwork than an HMO, but you may have to endure referrals for specific care. If you go out of network, you’ll have the pay the full cost.

However, you can then submit a bill to your POS plan for reimbursement. If you decide to go with a PPO, you have a moderate amount of freedom to see the provider you want. Similar to an EPO, you do not need a referral to see a specialist. You will pay more money if you choose to see a doctor who is out of network, and there will be more paperwork than the other insurance types. Like the EPO, you can see any doctor you choose to within the network, with a minimal cost, if not no cost to you. There is little to absolutely no paperwork involved with a PPO. Another type of health insurance is the Catastrophic Plan, which is only available to those under 30. This type of insurance has a lower premium; in other words, you pay less per month, and you’re allowed three visits to your primary doctor before the deductible begins. The best part; you get free preventative care, even if the deductible hasn’t been met.

It is important to note that a Catastrophic Plan has a deductible of a little of $8,100 for an individual and as much as $16,000 for a family. After these deductibles are met, all of your services are free. Another type of health insurance is HDHP, or High-Deductible Health Plan With or Without A Health Savings Account, or HSA.  Like a Catastrophic Plan, the HDHP plan you may pay less for your insurance with a high deductible. With an HDHP plan, you have the possibility of having any one of the following health insurance providers; HMO, PPO, EPO, or POS.

However, the out-of-pocket cost is much higher than other plans, but after you reach the deductible, you are covered 100%. If you decide to have an HSA or Health Savings Account, it will help pay for your care, and the money you deposit into your HSA is tax-free, and this amount can be used on any qualified medical expenses. However, to have an HSA, you must be a member of the High-Deductible Health Plan With or Without A Health Savings Account, or HDHP.

Aside from these health insurance plans, there’s another type called the Indemnity Health Insurance Plan. This plan is considered a fee-for-service plan. This is because there are pre-determined amounts or percentages of certain costs paid to the members for particular services. In many cases, the members pay upfront for all services provided and file a claim for reimbursement.

Another type of health insurance is Health Reimbursement Arrangements or HRAs. This type of insurance is for businesses, where an employer can offer their employees a health insurance plan, but without having to provide a group insurance plan. With an HRA, employers set a monthly allocation of funds per employee, whereby the employee finds the insurance they want, purchases it, and is reimbursed by their employer. Another insurance for employers is the Qualified Small Employer HRAs or QSEHRAs.

This type of insurance is for businesses with less than 50 employees. Similar to HRAs, QSEHRAs offer a cap on the amount each employee gets. Once the employee chooses their tax-free insurance plan, they purchase it and are then reimbursed. Next is Individual Coverage, or ICHRA. This type of insurance is accessible to businesses, no matter the size. There is no cap on the amount offered to the employee, and employers must reimburse their employees only the amount of the premiums. Lastly is Group Coverage HRA. Like the previous plans, this one is primarily for businesses. However, what is different is that this plan is in addition to a company’s existing health insurance.

Let us not forget the Affordable Care Act or Obamacare. The tax credit allowed those who meet the income limit, have several choices, whether they are HMOs, PPOs, EPOs, or POSs, to name a few. Hopefully, this article has shed some light on the different types of health insurance available. So those of you who are searching for health insurance, put on your reading glasses, warm up those fingers, and be ready to select the type of health insurance that is made just for you.

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