For many people, purchasing health insurance on your own, for the first time can be a confusing and intimidating process. Fortunately, eTotal Insurance is dedicated to helping you find the best health insurance rates to cover you and your family. In order to choose the best policy, it is important to understand the different types of health insurance. In this article we will explain the main types of health insurance coverage you can choose from.
There are five different types of health insurance plans. There are indemnity health insurance plans (also called fee-for-service plans), PPO (preferred Provider Organization), POS (Point of Service Organization), HMO (Health maintenance Organization), and HSA (Health Savings Account). An indemnity health insurance plan sits on one side of the spectrum while an HMO sits on the other. In between an indemnity health insurance plan and HMO are the PPO and POS plan, which combine features of both an indemnity plan and an HMO plan. An HSA plan in new as of 2003 and combines a high deductible health plan with a tax-advantage savings account.
Indemnity plans are extremely flexible, if a slightly higher cost is not an issue, then an indemnity plan may be the best plan for you. With an indemnity plan, individuals can choose the doctor and hospital of their choice. If a trip to the doctor is made, your doctor or hospital will submit the claim to your insurance company and you are then reimbursed for the medical expenses that your health insurance company covers. In most cases the insurer will pay for 80% or the costs and the individual will pay the remaining 20%, known as the coinsurance. However, if the provider charges more than the typical price for a procedure, an individual will have to cover the total cost of the procedure. Fortunately indemnity plans tend to cover a vast majority of procedures.
With a health maintenance organization you are required to pay a set premium, for this an HMO will offer you a range of health benefits and preventative care. In addition to a fixed premium, most HMOs will require an additional co pay at the time of a visit, in some cases a co pay applicable in hospital stays. When purchasing an HMO, individuals will choose a primary care physician, whom is seen for general care. It is the primary care physician who will refer an individual to a specialist in the provider network. HMOs are generally the most affordable individual and family health insurance plan.
A Preferred provider organization is the closest health insurance plan to an indemnity health insurance plan. With a PPO plan, an individual may visit any doctor at any time. Doctors, hospitals and other health care providers, who join a PPO network, have negotiated savings with the health care provider and pass that on to individuals who have purchased PPO health insurance plans. When making a doctor’s visit to a physician in the network, the individual will be required to pay a copayment for the visit. When visiting an out of network doctor, the individual will still receive coverage, but only a percentage of the bill will be covered. The remaining amount of the bill is the individual’s responsibility in addition to the copayment. In addition to copayments, PPOs may have deductibles. The deductible is the amount an individual must pay to an insurance company before medical expenses can be reimbursed.
A point of service plan combines the features of both an HMO and PPO. The POS plan allows for an individual to use a primary care physician, similar to an HMO, or they have the option to choose where to receive care, similar to the PPO plan. The POS plan also allows for an individual to choose a doctor out of both the PPO and HMO network and coverage will still be applied based on the out of network rules. Similar to a PPO, POS plans often times have a deductible, which is the amount paid for a POS plan before an individual is reimbursed for medical bills.
A health savings account, allows for individuals to save money specifically for future medical expenses, completely tax free. In order to open an HSA, an individual must be covered by a high deductible plan and not have any other health insurance. An HAS health insurance plan is a great solution for you individuals who are in good health, are not taking many medications, and do not anticipate any future day-to-day medical needs. Many times these are offered by employers, but can be purchased by individuals in some states.
Weather you decide to go with a PPO and choose your own doctor or go with an HMO and work with a primary care physician, ensuring you purchase the best health insurance is important for you and your family and shouldn’t be confusing. Once you determine which type of health insurance is right for you, use eTotal Insurance to shop for the best priced health insurance plans. With eTotal Insurance we help you determine which health insurance plans are the most affordable to you. eTotal Insurance is dedicated to helping you save money and find the best health care plan for you and your family.
