Types of Health Insurance
Health insurance is a legal agreement between you and an insurance company that helps pay for medical services like doctor visits, hospital stays and prescription drugs.
Most plans require you to pay a monthly premium, along with any applicable deductible and copays or coinsurance. These values can differ between insurers, so it’s essential that you evaluate them thoroughly.
Health maintenance organizations (HMOs) help control costs by making agreements with doctors and hospitals in a network to provide services at fixed prices. The plan also promotes preventive care, encouraging members to schedule regular checkups and screenings for diseases or conditions that could result in costly hospital visits if not caught early.
HMOs typically require you to reside or work within their service area in order to be eligible for coverage. They often promote integrated care, prevention and wellness, with a primary care physician coordinating your care.
HMOs may impose limitations on your choice of providers by requiring referrals from your primary care physician (PCP) for specialists. Furthermore, they may have restrictions on both in-network and out-of-network options.
Preferred Provider Organization, or PPO, is a type of managed care health insurance plan that offers members access to an exclusive network of doctors and providers who accept payment at discounted rates. In exchange for these discounts, plans negotiate fees and schedules with healthcare professionals and facilities on behalf of their members.
One major distinction between a PPO and HMO is that members are free to visit any doctor or hospital within their plan’s network without first getting a referral from their primary care physician (PCP). This is an invaluable benefit for patients who frequently need specialist consultations.
However, there are some disadvantages to choosing an out-of-network provider under a PPO. Patients typically end up paying more out of pocket when going outside the network; these costs take the form of premiums, copays and deductibles.
An EPO (exclusive provider organization) plan is a type of health insurance that covers medical services from doctors and hospitals within an exclusive network. While not as comprehensive as HMO or PPO plans, EPOs can still be suitable for some people.
Though there are benefits to this type of plan, it can also be more restrictive than other options. For instance, if you have a chronic illness or injury, a specialist who is not part of your network may need to be seen instead.
In certain circumstances, you may have to pay high deductibles. These are the amounts required to be paid annually before your plan kicks in and covers expenses.
EPOs often require pre-authorization for costly services and tests to guarantee members receive the care they need without paying for unnecessary procedures or tests.
Post-Occurring Sytem (POS) plans offer an affordable health insurance option for individuals on a budget. They have lower premiums than PPO plans and guarantee you an in-network copy of all medical bills.
PPOs, which only cover services provided through providers within their networks, do not extend coverage beyond what is provided by POS plans. With these, you are allowed to see out-of-network doctors and healthcare facilities with referrals from your primary care physician (PCP). However, note that you will have to fill out paperwork for out-of-network care and the copayment for out-of-network service will likely be higher than for in-network access.
Post-paid plans (POS plans) are ideal for travelers who require specialized care that may not be available in their hometown. Furthermore, they offer full coverage for true emergencies like getting severely ill while away on vacation or breaking a leg and needing to visit the emergency room.