What type of health insurance plan should you buy? If you’re not sure, you’re not alone. The world of health insurance and the health insurance marketplace can be confusing to navigate and the terminology can be difficult to understand. It’s essential to have some basic knowledge before you start to compare plans and coverage.
Our Addition Financial members often come to us with questions about insurance in general and health insurance in particular. To help you navigate the often-confusing waters of the health insurance marketplace, we’ve created this guide with 10 types of health insurance plans and providers you should know.
#1: Health Maintenance Organization
A Health Maintenance Organization (HMO for short) is a type of health insurance plan that focuses on providing preventive health care to its members to keep them healthy and minimize the risk of severe medical issues. That’s where the “health maintenance” part of the name comes in. The HMO model is designed to help members get into good health and stay there by providing routine care and health guidance.
HMO members may only receive medical treatment from providers who are either employed by or approved by the HMO. That’s another way of saying that there is no treatment available outside of the HMO network except in a medical emergency. Another thing that sets HMOs apart from other insurance plans is that in an HMO, each member must choose a primary care physician (PCP) and their PCP is responsible for referring them to specialists as needed.
#2: Preferred Provider Organization
A Preferred Provider Organization (PPO for short) is a health care plan where there is a network of preferred providers who have negotiated lower rates with the health care plan. PPO members who go to in-network providers for treatment typically have lower deductibles, copays and out-of-pocket maximums than those who go to out-of-network providers.
In a PPO, members are typically not required to choose a primary care physician nor are they required to get a referral to see a specialist if one is needed. They are free to obtain treatment outside of the network at the higher prices at any time, not just in an emergency.
#3: Exclusive Provider Organization
An Exclusive Provider Organization (EPO for short) has more in common with an HMO than with a PPO. Members of an EPO may seek care only from providers who are approved by the EPO. The only exception would be if they experienced a medical emergency, in which case they could go to the nearest hospital or urgent care center.
With an EPO, the organization negotiates rates and approves providers to keep costs as low as possible. By restricting members to approved providers, they can be sure that they can control the expenses associated with health care. Unlike an HMO, an EPO allows members to make appointments with specialists without a referral provided that they choose an approved provider.
#4: Point of Service Plan
A Point of Service Plan (POS for short) is a plan that is a hybrid of an HMO and a PPO. Members of a POS plan must choose an approved primary care physician to serve as their main point of contact. If they need to see a specialist, they can see someone outside of the network as long as they get a referral from their primary care doctor. Inside the network, no referral is required.
If a member seeks care outside of the network without an approval, they will be liable for most of the costs. The POS plan may pay a small percentage but the costs will be far higher if they do not have a referral. This type of individual health insurance plan may be a good choice for people who want the freedom to pick their doctors.
#5: Catastrophic Health Plan
A Catastrophic Health Plan is a plan that is available in the healthcare marketplace only to people who meet certain qualifications. In most cases, the people who buy catastrophic health plans are under the age of 30 and in good health. People who are over 30 may be granted a hardship exemption if they can prove that they can’t afford another type of coverage.
Catastrophic plans cost far less than the other plans we have listed here. Generally, they provide three visits to a primary care physician before the deductible applies and some provide free preventive care. These plans are not ideal for anybody with a pre-existing condition or ongoing health issues because they provide limited coverage and most of the expenses are out of pocket.
#6: High Deductible Health Plan
A High Deductible Health Plan (HDHP for short) is defined as a health plan with a deductible of at least $1,400 for an individual and $2,800 for a family plan. There is also a limit on the total yearly out-of-pocket expenses, which may not be more than $7,050 for an individual or $14,100 for a family. An HDHP will also be one of the following: an HMO, a PPO, an EPO or a POS plan.
Many people who opt for a high deductible plan pair it with a Health Savings Account. With an HSA, you can set aside up to $3,600 as an individual or up to $7,200 if you have a family plan. The money in your HSA may be withdrawn tax-free to pay for qualified medical expenses, including your deductible and copayments. The money may not be used to pay your insurance premiums.
#7: Primary Care Physician
We’ve already talked about the fact that certain healthcare plans require you to choose a primary care physician, but we should review what that term means when it comes time to choose a provider.
A PCP is the person you go to for regular check-ups or as a first step in treating a non-emergent illness or injury. In many cases, people prefer to choose an internist or a family doctor as their primary care physician but there are other options as well. As we mentioned above, people who are members of an HMO or a POS plan must visit their primary care doctor first to get a referral to a specialist. That is not the case in a PPO or EPO.
#8: Specialty Care Providers
Your PCP can help you with most routine health issues, including regular checkups, minor infections and injuries and other illnesses. However, there are cases when you may need to see a doctor who specializes in treating certain illnesses or bodily systems. Here are some examples:
- Cardiologist (heart diseases)
- Pulmonologist (lung diseases)
- Dermatologist (skin diseases)
- Oncologist (cancer)
- Gynecologist (female reproductive system)
- Neurologist (nervous system disorders)
- Immunologist (immune system disorders)
In most healthcare plans, there may be a higher copayment to visit a specialist but that is not always the case. As we noted above, in an HMO, you would need a referral from your primary care doctor to visit a specialist. In other health plans, you can make your own appointments but in most cases, you will want to stay inside the network to minimize the expense.
#9: Urgent Care Center
An urgent care center or facility is a place where people can go for treatment if they get sick or injured outside of their doctor’s regular office hours or if they have an illness that’s not severe enough to necessitate a trip to the emergency room. For example, if your child sprained an ankle playing soccer on a Saturday, the chances are good that their pediatrician will not be in the office, but a sprain may not be serious enough for the emergency room.
If you’re a member of an HMO, PPO or EPO, you should get a list of approved urgent care facilities that are in the network. In a true emergency, you should go to the closest hospital emergency room and as we have noted, your treatment will be covered regardless of whether your regular health plan requires in-network treatment in most situations.
#10 Emergency Room
The reason that health insurance coverage plans have designated urgent care facilities is to minimize the chance that someone who doesn’t require emergency care will go to the emergency room, where wait times tend to be long and there is an elevated risk of infection from other patients.
When you shop for health insurance, it is essential to understand your health coverage options and what they mean for your ability to get the treatment you need, when you need it. The 10 plans and providers we have listed here will give you a solid base of knowledge to choose the right plan for your needs and budget.
Opening a Health Savings Account can give you the peace of mind that you’ll be able to cover your out of pocket expenses. Click here to read about Addition Financial’s HSA and open an account today.
Posted on Feb 4, 2022
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