Recent events have hammered home the importance of health insurance in no uncertain terms.
Few of us can afford the $10,000 per day in costs associated with a stint in ICU.
If you’re one of the thousands of people who’ve realized that they can’t put off buying health insurance any longer, you’ve probably encountered a dizzying array of choices.
Keep reading to find out more about the different types of health insurance and whether they’re a good fit for you.
The Two Main Types of Health Insurance
All types of health insurance coverage fall into one of two categories. These are public and private health insurance plans.
The Federal government offers public health insurance. You can get private cover via your employer or buy it from the ACA marketplace.
Public Health Insurance Policies
These types of health insurance policies offer medical care at a reduced cost due to government funding. Enrollees pay low monthly premiums and moderate deductibles as well as out-of-pocket expenses.
There are three major types of public health insurance. These are:
Medicaid’s the most affordable type of health insurance available. It’s offered to low-income and vulnerable American citizens. If you meet certain criteria, you can sign up for Medicaid and benefit from exceptionally low-cost coverage as well as long-term care.
You can reach out to your state representative to find out more about Medicaid.
All US citizens over the age of 65 automatically get Medicare membership, unless they’re still covered by their employer. If you’re still a member of an alternative health insurance policy on your 65th birthday, you can sign up for Medicare when it lapses.
Medicare members pay various monthly premiums based on how long they contributed to the Medicare fund while employed. They also pay out-of-pocket expenses and coinsurance for some medical services.
There are four different health insurance policies available via Medicare, as follows:
- Part A covers most in-hospital costs, nursing facility care, and home health care
- Part B pays for medical supplies, outpatient care, preventive care, and some doctors’ services
- Part C, also known as Medicare Advantage, offers private health insurance
- Part D covers the cost of prescription drugs
Medicare also offers a range of supplementary products, called Medigap, that cover extra expenses like OOP and coinsurance costs.
CHIP stands for Children’s Health Insurance Program. It’s a replica of Medicaid for children under 18 years old. Like Medicaid, each state runs its own CHIP program, so enrollment criteria and benefits vary depending on where you live.
Private Health Insurance Options
Private health insurance, also known as Obamacare, offers a wide variety of plans with more or fewer benefits and varying costs.
You or your employer buy these different types of health insurance from private insurance brokers who tailor-make their own policies according to their customers’ most common needs.
There’s a limit to their freedoms though. By law, all private health insurance policies must include ten basic elements. These are:
- Emergency care
- Outpatient treatment
- Prescription meds
- Pediatric services including dental and vision care
- Preventive care
- Laboratory services
- Substance use disorder and mental health services
- Habilitative and rehabilitative care
- Neonatal, maternity, and pregnancy care
You can choose from five major varieties of private health care. These are:
Health Maintenance Organization Plans – HMOs
With these plans, a primary care provider is your main source of medical care. When you sign up for this type of cover, you choose your primary care provider from a list of professionals right at the outset.
You’ll always visit this practitioner first and they’ll provide a referral to an appropriate specialist if necessary.
HMOs cover more preventive services than the other types of plans and don’t have a deductible. You can look forward to low premiums, but you’ll usually have to copayments.
You can’t get treatment outside of your HMO network unless you get prior authorization.
Preferred Provider Organization Plans – PPOs
You needn’t specify a primary care provider when you sign up for a PPO policy, but you’ll pay higher premiums if you want to use services outside their network.
Your insurer only pays your medical bills once you’ve met an annual deductible. You might have to pay co-insurance or a co-payment toward certain treatments.
Treatment outside the network also attracts higher out-of-pocket costs.
Exclusive Provider Plans – EPO
HMOs and EPOs are alike in several aspects. EPO plans only allow you to see doctors within their network, but you don’t need a referral to see a specialist, provided they’re in the fold too.
You pay low co-payments when you’re enrolled in these plans but there’s often a deductible involved in your cover, depending on the specific plan you choose.
EPO plans are an affordable option for your general medical needs, but things can get expensive if you ever need unexpected treatment.
Point-Of-Service-Plans – POS
POS coverage is a happy medium between PPS and HMO plans for some people. You’ll choose a primary care physician at the outset, need a referral for specialist care, and require pre-authorization for some procedures.
Often, you’ll receive better coverage if you only opt for services provided by your primary care provider and you’ll pay a deductible if you visit an out-of-network professional.
Sometimes you pay for your treatment upfront with POS plans, and then submit a claim for reimbursement.
Short Term Health Insurance
If you ever find yourself in between health insurance policies, you should consider short term health insurance to tide you over.
Short-term health cover’s an affordable option for those who’ve turned 26 and no longer qualify for their parents’ health insurance benefits, when you’re in between jobs, or for people who aren’t yet eligible for Medicare.
Short-term insurance is an important backup in instances where you’re waiting for your new healthcare benefits to start too.
Consider Your Options Carefully
It’s important to research the different types of health insurance carefully before you commit, especially when it comes to things like premiums, deductibles, and co-payments.
Not only does health insurance provide you with financial assistance when you most need it, but it can also do a lot to ensure you get the right treatment to prevent serious problems from evolving.
Do you have more questions about everyday issues? Explore some more of our articles for more great information on health-related issues.