6 Common Types Of Health Insurance Plans You Should Know About
Accidents, medical emergencies, chronic illnesses can be very expensive. The cost of these health conditions can deplete your financial resources. You can escape this medical bankruptcy through financial systems that can help you foot part or all your medical expenses.
With health insurance plans, you can make advance payments of premiums to an insurer to be eligible for benefits. In return, the plan protects you from health related risks like accidents, long term diseases, among others. Not only does a healthcare plan grant you access to great healthcare but also protects your assets.
Most people get their private healthcare plans from employers or unions while others get them from governments. These health insurance plans may provide a limited or comprehensive range of medical services. Some may include privileges to certain medical services or income benefits for time lost during illness.
A good number of them are managed healthcare plans. Under such plans, the healthcare of those who enroll is coordinated and managed by different institutions. Apart from insurance companies, employers, consumer groups, and government hospitals also sponsor these plans. To find what suits your needs, here is a list of different health insurance plans you should know about.
1. Health Maintenance Organization (HMO) Plan
With this plan, health services are delivered through a network of providers and facilities. Generally, it offers a broader range of preventative services and is relatively cheaper. Although HMOs are the most purchased health insurance plans, there are limitations. You can only choose a primary care provider (PCP) within your approved network for all your care and services.
2. Preferred Provider Organization (PPO) Plan
Under this health insurance plan you have access to a certain number of doctors and hospitals. You are encouraged to use them as they are contracted to provide service to plan members at a discounted rate. Choosing providers that are not within that network will cost you more.
3. Point Of Service (POS) Plan
It is a combination of HMOs and PPOs. Your primary care provider is at liberty to refer you to other doctors within that network. You have the freedom to choose a doctor from outside the network but it is subject to a deductible or co payment. Most health insurance plans with such elements target specific needs.
4. Exclusive Provider Organization (EPO) Plan
Unlike HMOs, you have access to a large network of both primary care providers and specialists. Except for emergencies, such health insurance plans cannot cover services outside the network. So if you seek an out of network provider, you will bear the full cost of the services yourself.
5. Fee For Service (FFS) Plan
It is also referred to as the Indemnity Health Insurance Plan. It is a traditional health plan that is less restrictive. You can visit any doctor or hospital that accepts such health insurance plans. You will pay the doctor after which the insurer will reimburse you if you pay the deductibles. While the plan has no limit to the network of caregivers, preventative care is less and can be expensive.
6. High Deductible Health Plan (HDHP)
For those people with no plans to use their medical coverage often, this health insurance plan is best. However, you will pay higher out of pocket costs until you reach the deductible amount. After attaining the maximum amount, the insurance coverage can become effective. Compared to other plans, a HDHP has lower monthly premiums and you can save money. Many people like to couple HDHPs with a Health Savings Account. The money saved in this account can help pay for your care. It is tax free and can be used to cover eligible medical expenses. Excess contributions can be carried forward each year and accrue interest without being taxed.