Health care insurance is an agreement between an insurer and policyholder in which the latter agrees to cover some or all of an insured person’s medical costs in exchange for paying a monthly premium.
Different plans impose various rules and restrictions when it comes to who can see for healthcare services, from restricting your choices of doctor or specialist to higher out-of-pocket costs if you go outside their network.
HMO
HMOs are healthcare plans that emphasize preventive, wellness and coordinated care. Members select a primary care physician (PCP) from an HMO network who manages their care and makes referrals to specialists. HMOs generally have lower monthly premiums than PPOs but may limit access to healthcare providers since most specialists require referrals before seeing anyone directly.
HMOs typically cost less than PPOs; however, costs can differ based on your region and whether or not you enroll individually or through an employer. An HMO may be best for those who enjoy working closely with their healthcare provider and receiving referrals when necessary to see specialists, while staying within network when possible; but for those wanting greater flexibility another plan option might be more suitable since HMOs don’t cover every type of medical service and may deny coverage for services deemed less than cost-effective while generally won’t cover out-of-network prescriptions except emergency situations.
PPO
Preferred provider organization plans (PPOs) are an attractive type of managed care plan because they give participants more freedom in accessing healthcare providers both within their network and outside, without referral. With higher premiums but wider range of services on offer than HMOs, these plans may be better options for people traveling regularly or wanting greater healthcare freedom.
Some plans require non-emergency medical tests, procedures and treatments be pre-authorized by the insurance company before being provided to ensure cost control by providing only necessary yet cost-effective care. These pre-authorizations allow companies to ensure only necessary and cost-effective care is given.
Some PPOs require participants to meet an annual deductible before the plan starts sharing costs with them; others have copays that policyholders pay out-of-pocket and then the insurance covers any remaining balance.
Catastrophic
A catastrophic health care insurance policy offers low monthly premium costs with coverage for severe medical issues. Available both on and off exchange, this high-deductible health plan’s deductibles typically reach thousands of dollars; once met, coverage begins immediately. These policies may be ideal for younger individuals who do not anticipate making frequent use of healthcare systems.
Marketplace catastrophic plans must provide three annual doctor visits and preventive services free to consumers, but require users to pay all other covered medical services up until meeting the deductible. Since these plans cannot be purchased with subsidies from the Affordable Care Act (ACA), they should not be considered suitable options for people eligible for subsidies; however they could provide comprehensive coverage.
Short-term
Affordable short-term health care insurance plans provide coverage of up to one year and may help bridge the gap between employment and when new job benefits kick in. Some major health insurers, like UnitedHealthcare, offer such policies; it is important, however, to read carefully through and comprehend their differences from traditional health insurance policies.
These plans tend to be cheaper than their ACA-compliant counterparts, yet don’t cover preexisting conditions and have higher deductibles; additionally, coverage duration is typically shorter and medical underwriting can be used to deny applications with certain medical conditions.
Some individuals can benefit from short-term insurance plans, including recent college graduates searching for employment with health insurance benefits or those who missed open enrollment and cannot afford COBRA or an Affordable Care Act plan (ACA plan). However, such policies do not fall under their regulation.
