Different Types of Health Insurance



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These days, there are numerous choices when it comes to health insurance plans. Whether you are purchasing a health insurance plan from your state’s marketplace or through your insurance broker, you want to know what your options are. That is why this article is going to cover everything you need to know about the different types of health insurance, from bronze to platinum and from HMOs to POS plans.

Four different types of health insurance

Even though exact insurance coverage varies from one insurance brand to another, there are four common types of plans:

  • HMOs (Health Maintenance Organizations)
  • EPOs (Exclusive Provider Organizations)
  • PPOs (Preferred Provider Organizations)
  • POS (Point-Of-Service)

Each plan also has several levels of benefits you can choose from. These levels correspond to valuable materials, starting from bronze (least valuable) to platinum (most valuable). The difference between these levels lies in the actual coverage of your medical cost. Bronze-level coverage will, for example, cover around 60% of your medical costs on average, while a platinum plan covers 90%. You are expected to pay the difference, of course.

gold bar against dark background
Most health insurance plans have coverage levels such as bronze, gold, and platinum.

If you are under 30, you will also have the option of purchasing a high-deductible, catastrophic plan. These plans will pay for any medical costs after a deductible is reached. However, the deductible itself is very high under these plans (almost $9,000 in 2022). The plan will also cover the first three primary visits and offer preventive care for free, regardless of whether you have met your deductible or not.

More commonly, however, you will be able to purchase one of the four primary types of health insurance plans. Let’s take a look at them in a bit more detail.

Health Maintenance Organizations

HMO plans are delivered through a specialized network of facilities and healthcare providers. These plans offer the least freedom when it comes to choosing your healthcare providers, but it also involves the least paperwork. You will be required to choose a PCP (Primary Care Provider) which must be within the specified network.

The primary benefit of HMO plans is that they typically cost less than other types of health insurance plans. If you stay in-network, that is. Otherwise, you may have to pay the full medical bill on your own.

Under HMO, you will need to pay a monthly premium and reach a certain deductible before your coverage actually starts. Preventive care is excluded, of course, and your insurance plan will pay for it. Lastly, you may need to copay or co-insurance for each type of care. You pay copay fees when you get care (usually a low, flat amount), and you pay coinsurance when you pay a percentage of charges. Both count toward your deductible.

Exclusive Provider Organizations

EPOs are quite similar to HMOs, as you still have a network of providers to choose from. While some HMOs may offer coverage for services rendered out of network in some cases, most EPO plans do not. However, there’s also an option to forgo choosing your PCP. What this means is that you may be able to visit a specialist in your network without obtaining a referral from your PCP beforehand.

stethoscope on a medical chart
EPO plans do not force you to choose a PCP.

This seemingly small detail allows you a greater degree of freedom, as you will not need to visit your primary care doctor every time you need to see a specialist. However, you practically lose all coverage if you go out of network. Emergencies are, of course, still covered.

Premiums, deductibles, copay, and coinsurance are more or less the same as those found in HMOs.

Preferred Provider Organizations

PPOs offer the highest degree of flexibility, as they feature the largest provider network. With a PPO, you will have an unparalleled choice when it comes to selecting your health providers. Furthermore, you do not have to choose your PCP with a PPO plan, either, and you may even get some coverage for services rendered from providers outside of your network.

While this may seem to be the ideal health insurance plan, there are a few things that you might want to be wary about. First, PPOs usually feature the highest monthly premiums. Second, even though you will have some coverage for out-of-network services, your out-of-pocket expenditures may be considerable. All of this depends on the particular plan, of course.

It is also worth noting that the paperwork that comes with visiting a doctor outside of the network can be rather annoying to deal with. The claims process also depends from one insurance provider to another but having to make a claim is never a pleasant experience. Luckily, in-network services require practically no paperwork whatsoever.

person holding two $20 bills
PPO plans may be the most versatile, but they usually feature additional costs.

Point Of Service plans

POS plans are a combination of PPO and HMO plans. This is one of the types of health insurance that features a smaller network than in a PPO plan, but the costs for in-network services are similar to those in HMO plans. You will also be required to choose a PCP when you purchase a POS plan, and you will need to get a referral any time you wish to see a specialist.

You will also have the option to see out-of-network providers, but your out-of-pocket expenses will be higher if you choose to do so. The paperwork that is involved in POS plans (when you visit an out-of-network provider) is moderate.

Which insurance plan is best for me?

Your choice of plan will depend on your specific healthcare needs. For example, if your overall health is good and you do not pay frequent visits to the doctor’s office, you will want a plan that has a higher deductible and a lower insurance premium. On the other side, if you expect to require more than simple preventive care it is best to opt for a plan that has lower deductibles and higher monthly premiums.

That being said, simply knowing about all the types of health insurance may not be enough to choose the best plan for your needs. If you require any help in choosing the ideal health insurance plan, you can always get in touch with ACME Insurance Agency, and we will provide you with an ideal solution, one that may save you a lot of money in the long run.


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