For most people, health insurance comes in the form of a group plan offered by their employer, spouse’s employer or parent’s plan. Others purchase their own individual plan or use COBRA coverage. Many have no healthcare insurance policy at all. No matter if you are married, single, a parent or student, you likely need some level of health insurance to protect yourself in the event of a serious illness or accident. The costs of healthcare get more and more expensive as time passes by.
The concept behind health insurance generally refers to the type of insurance that helps pay for medical expenses, and sometimes includes disability or long term care. In addition to employer-based coverage, there are also government sponsored health insurance programs or individuals can purchase a policy. No matter who provides your health insurance opportunity, a premium must be paid either monthly or annually. Some employers will even pay those premiums for their employees.
There are important choices to be made when deciding on an individual plan, and many of these choices impact your level of care, as well as your finances. There are several different plans offered by the major health insurance providers – it’s just a matter of making sense of all the choices out there.
So what is the difference between an HMO, PPO, POS Plan, Indemnity Plan, etc.? The most common plans provided by health insurance companies can be broken down into three groups. It is important to understand the different groups even if you will never need to shop for a health insurance agent because your health insurance is provided through your employer as you will likely still need to choose between one of the plan types.
- Indemnity or Point-of-service Plans. These types of healthcare insurance policies are the most traditional and allow you to go to any doctor you choose. They are the most flexible, most expensive, and the hardest to find.
- Health Maintenance Organizations (HMOs). An HMO is a group of healthcare professionals and medical facilities that are sold by health insurance providers as a package of care at a fixed price. Patients are required to choose a primary care physician, who must refer their patients to a specialist if one is needed. The specialist is not covered by the health plan if the patient is not referred by their primary care physician.
- Preferred Provider Organizations (PPOs). A PPO has the same feel of an HMO, but more flexibility in being able to see specialists outside of the original network of professionals and facilities. Benefits are reduced if you see a doctor out of network and you may pay more out of your own pocket, but there is more flexibility and choice.
So where can you obtain health insurance? If you cannot elect for health insurance through your employer or spouse’s employer, there are many different health insurance companies or health insurance providers to choose from.
Purchasing an individual policy is more expensive than the traditional group policies provided by employers. It is important to evaluate each health insurance provider carefully and weigh the costs and benefits accordingly. You will likely want to consult a health insurance agent who is familiar with the different health insurance providers and policies in your area.
Finding a good health insurance company to work with is important in determining your overall level of care. It is likely that your employer will offer a health insurance plan with one of the large health insurance providers and many of the top insurance companies provide individual polices to consumers. Before selecting a plan, research the doctors each plan makes available to you and explore the different elements of the health insurance policy. Find the health insurance provider and policy that best fits your needs.