What is Health Insurance?
Individual health insurance programs are designed for individuals and families who cannot obtain health insurance through an employer. Due to the continually rising cost of medical care, it has become more important to provide health insurance for you and your families.
No one plans to get sick or hurt, but most people need medical care at some point. Health insurance is coverage that provides for the payments of benefits as a result of sickness or injury. It also includes insurance for losses from accident, medical expense, disability, or accidental death and dismemberment. Health insurance protects you from unexpected, high medical costs which can sometimes lead into deep debt or even bankruptcy. You pay less for covered in-network health care, even before you meet your deductible. You get free preventive care, like vaccines, screenings, and check-ups, even before you meet your deductible. If you have a Marketplace plan or other qualifying coverage, you don’t have to pay the fee that many people who don’t have coverage must pay.
Health Insurance Types
Health Maintenance Organizations (HMOs) and Exclusive Provider Organizations (EPOs)
- HMOs and EPOs may limit coverage to providers inside their networks. A network is a list of doctors, hospitals, and other health care providers that provide medical care to members of a specific health plan. If you use a doctor or facility that isn’t in the HMO’s network, you may have to pay the full cost of the services provided.
- HMO members usually have a primary care doctor and must get referrals to see specialists. This is generally not true for EPOs.
Preferred Provider Organizations (PPOs) and Point-of-Service plans (POS)
- These insurance plans give you a choice of getting care within or outside of a provider network. With PPO or POS plans, you may use out-of-network providers and facilities, but you’ll have to pay more than if you use in-network ones. If you have a PPO plan, you can visit any doctor without a referral.
- If you have a POS plan, you can visit any in-network provider without a referral, but you’ll need one to visit a provider out-of-network.
High Deductible Health Plan (HDHP)
- High Deductible Health Plans typically feature lower premiums and higher deductibles than traditional insurance plans.
- If you have an HDHP, you can use a health savings account or a health reimbursement arrangement to pay for qualified out-of-pocket medical costs. This can lower the amount of federal tax you owe.
Catastrophic Health Insurance Plan
- A catastrophic health insurance plan covers essential health benefits but has a very high deductible. This means it provides a kind of “safety net” coverage in case you have an accident or serious illness.
- Catastrophic plans usually do not provide coverage for services like prescription drugs or shots.
- Premiums for catastrophic plans may be lower than traditional health insurance plans, but deductibles are usually much higher.
Which is Best?
It depends on how comfortable you are with restrictions and how much you’re willing to pay. The more a health plan limits your freedom of choice, say by not paying for out-of-network care or by requiring you to have a referral from your doctor before you see a specialist, the less it will generally cost in premiums and in cost-sharing. The more freedom of choice the plan permits, the more you’re likely to pay for that freedom.
By consulting with an Alliance West Insurance, Inc., agent, we can find the balance you’re most comfortable with. If you want to keep your costs low and don’t mind the restrictions of having to stay in-network and having to get permission from your PCP to see a specialist, then perhaps an HMO is for you. If you want to keep costs low, but having to get a referral for a specialist is inconvenient to you, consider an EPO.
If you don’t mind paying more, both in monthly premiums and cost-sharing, a PPO will give you both the flexibility to go out-of-network and to see specialists without a referral. But, PPOs come with the extra work of having to get pre-authorization from the insurer for expensive services.
The bottom line: Each type of health plan is just a different balance point between benefits vs restrictions, and between spending more vs spending less.