Health insurance can be one of the most confusing and overwhelming aspects of life. According to Mint.com, it’s not uncommon to ask yourself questions such as “What plan is right for me?” or “How much should my deductible be?” when selecting a health care plan, whether it’s offered through your employer or you’re self-employed and looking for some sort of coverage.
We get it. Health care can be confusing and the plan you select should be reflective of your current stage of life. eHow describes health insurance as reimbursing you for certain types of medical insurance, but not all. Staying in the know of what to look for and what you need are key pointers. We’ve broken down the five main types of health insurance below so you can make the choice on what plan works best for you:
HMO/EPO
This is a very basic type of health care plan, offered by many employers. HMO stands for “health maintenance organizations” and EPO stands for “exclusive provider organizations.” These types of health plans typically place an emphasis on preventative care, such as routine and annual check-ups, so that additional coverage isn’t typically needed, especially among younger members. For these reasons, monthly premiums are generally somewhat higher compared to other types of health care plans, but things like co-pays and deductibles are generally lower.
Your personal information is just as important as choosing a health insurance provider. Investing in identity theft protection, like with Lifelock.com, will insure your credit and personal information, adding peace of mind and taking stress away while figuring things out for health coverage. Guarding your personal details is key when providing sensitive information to your health care provider.
PPO
A PPO, or “preferred provider option,” is another common type of healthcare program. A PPO plan rewards members for using certain “in network” physicians versus “out of network” physicians with lower fees and co-pays. Under a plan like this, you typically have to pay much more for using out of network physicians and hospitals. PPO plans are very common plans and are typically affordable to members, while also offering a good variety of coverage options.
POS
POS, or “point-of-service,” plans are described as a combination between PPO and HMO plans. Like with an HMO plan, you select a physician from a list of approved providers that are covered. And like a PPO plan, you’re encouraged – often financially – to use in network providers. However, unlike a PPO plan, you can often times be reimbursed if you use an out of network provider.
Fee-for-Service
Fee-for-service health care plans are rather labor intensive for members. Unlike the aforementioned health care options, this plan requires you to file a claim every time you receive care. Think of it like an auto or home insurance policy, where when you need to use it, you have to file a claim so your insurance provider can approve after analyzing your coverage options. Once you meet your yearly deductible, then you’re able to be reimbursed for any medical care. Policies such as this are less common compared to PPO, HMO and others.
HDHP
HDHP stands for “high deductible health plan.” Wisebread.com states that under this health insurance option, members have to pay for their services out of pocket (unless some preventative care is covered) until they reach an annual deductible, which is often thousands of dollars (sometimes as much as $6,000). These types of health plans are ideal for young workers who don’t anticipate having to see a doctor often or requiring any surgery in the immediate future. Because, for example, if you undergo a surgery under a HDHP plan that costs $12,000, you’re on the hook for whatever your deductible is.
However, with HDHP plans, employers typically offer health savings or flexible spending accounts, in which employees and employers contribute (often pre-tax) dollars into an account that can be specifically used for medical purposes. Because costs can add up under an HDHP plan, accounts like these help offset doctor’s visits.
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