Types of Health Insurance Plans


Choosing the correct Health Insurance Plan is the key to maintaining physical and fiscal health. There are a variety of health insurance plans available in today's health care market that offer various levels of coverage, flexibility, and cost. Being informed about these plans will allow individuals and families to select the most effective plan in relation to what their health care needs and budget require.



The most typical type of health insurance is the Health Maintenance Organization (HMO) plan. HMOs require members to choose a primary care physician (PCP) and to get referrals prior to seeing specialists. HMO plans cost less in premiums and out-of-pocket costs upfront but limit coverage to a network of physicians and hospitals. This is a good option for those who prefer to be organized and do not mind seeing physicians and other specialists from a specific network.


Another very well-known plan is a Preferred Provider Organization (PPO). PPOs do not require referrals and have greater freedom in provider selection than HMOs. Although members may visit out-of-network doctors if they wish, it does cost more. PPOs do typically include higher premiums and deductibles. PPOs are effectively designed for persons who want to have more control over their healthcare choices, want to visit specialists without asking permission from their primary care physician (the role is a referral), and for people on travel and/or who migrate seasonally each year.

The Exclusive Provider Organization (EPO) has features of both the HMO and PPO approach to medical coverage. Like HMOs they have lower costs when you use the network, but you aren't required to get a referral for specialist services. The downside is that the service covered is in-network services only, unless there is an emergency situation. EPOs may be good for individuals who do not feel they will require specialist services frequently, but who want to have more selection of in-network providers.


Point of Service (POS) plans are similar to a combination of an HMO and PPO plan. Members must have a primary care physician and obtain referrals to see a specialist, but can use out-of-network providers at a higher cost. POS plans may be preferable for members who want provider system flexibility while keeping their costs standardized.

High-Deductible Health Plans (HDHP) are a different category and are commonly paired with Health Savings Accounts (HSAs). HDHPs have a lower monthly premium cost but increased deductibles costs. HDHPs are ideal for healthy individuals who do not expect many medical expenses, save money on their premium costs while being allowed to accumulate a non-taxed medical expense tax free plan for health costs at a later time.


Finally, you may have state-supported programs like Medicaid or Medicare. Medicaid benefits are equivalent to full insurance coverage for low-income people and families at no more than very nominal costs. Medicare is available to people 65 and older and to certain disabled beneficiaries. There are divisions within both programs and various ways to provide coverage to millions of Americans needing life-saving care when the time comes.


Knowing the choices there are will make it easier for the consumer to make wise decisions on a health insurance policy. This evaluation would deliver even more success and peace of mind because you would be balancing the positive and negative aspects of each policy option relative to your health requirements and financial situation. While all that is subject to change in the health system, an educated individual in regard to those options will help direct his attention in the right direction to take care of his health and his financial future.