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Health insurance terminology is tricky, but decoding the different types of health insurance plans available saves time and money. While qualified health insurance agents are happy to provide education, smart and savvy subscribers (that’s you) should arm themselves with knowledge. Review some of the most popular types of health insurance plans below (and learn about a few unusual ones, like EPO and POS plans), then have your questions ready when you contact your health insurance agency.
HMO (Health Maintenance Organization)
HMOs are probably the most well-known types of health insurance, but plan requirements are often confusing. An HMO plan requires a primary care physician (PCP), and specialist visits need referrals. For example, you may suspect suspicious skin growths on your back. Instead of finding a dermatologist on your own, you’d first consult with your PCP, who’d then refer you to a plan-approved specialist. Note that HMO plans focus on preventative care, meaning regular checkups and wellness visits are usually covered. This keeps costs down, reducing or eliminating copays. However, subscribers with ongoing health issues may find an HMO too restrictive, so evaluating your health care needs is crucial.
PPO (Preferred Provider Organization)
PPOs are the second most popular types of health insurance. These are often pricier than other plans and require copayments, but a PPO gives consumers greater control over health care needs. Also, PPO plans don't require a PCP and specialist referrals are unnecessary, speeding up the process of finding medical services. Unfortunately, the flexibility offered by a PPO means you're responsible for filing reimbursement claims, a sometimes unwelcome task. You will also find that Preferred Provider Organization plans do cost a bit more than HMO plans.
POS (Point of Service)
POS plans combine features of PPOs and HMOs, making POS plans attractive options for patients needing additional control over healthcare spending. Referrals from a PCP are required but out-of-network providers are permitted. Copays under POS plans are higher due to the flexibility offered under these services.
EPO (Exclusive Provider Organization)
EPO insurance plans are like HMOs, covering in-network and emergency services. An EPO is an excellent choice for those seeking reduced premium costs but wanting the flexibility to choose specialists. PCPs are not required and referrals aren't necessary, but you're responsible for ensuring providers are covered.
Other Health Insurance Options
An indemnity plan is similar to pay-as-you-go cell phone services: Insurance companies reimburse subscribers as expenses become incurred. You may also hear indemnity plans referred to as "limited benefit plans," since they are intended as supplemental coverage—think of it as an add-on option for existing plans that don’t fulfill your health needs. If this seems confusing, think of it this way: Say you suddenly require emergency surgery that’s not covered by your health insurance. You’d want to explore an indemnity plan to fill in any coverage gaps.
HSA (Health Savings Accounts)
An HSA isn’t a type of health insurance plan, but like an indemnity plan, it supplements existing coverage while functioning like an interest-bearing bank account. HSAs are sometimes available to subscribers with high premium plans, like PPOs. If your employer offers an HSA, they’re giving you an opportunity to set aside pre-taxed income to pay for copays, deductibles, and other medical expenses. This money can be withdrawn without paying taxes. If you don’t use your HSA funds, they carry over from year to year.
Making Sense of Insurance
Decoding the types of health insurance available is daunting—especially when you’re faced with an unforeseen health emergency. Though insurance companies offer a variety of benefits, minimum essential health services will always be included, such as:
- Emergency care
- Lab tests
- Prenatal care
Remember, though, if certain services aren’t available to you, your insurance agent can try adding an HSA or an indemnity plan to your coverage. These services aren’t always advertised or offered by employers, so securing a qualified insurance agent guards against unwanted charges. Many insurance agents will also help you shop around for the best types of health insurance for you, so getting an insurance quote is beneficial. Some agencies can even obtain certain types of health insurance within a day, either online or over the phone. Take control of your health, but don't go at it alone! Health insurance agents are on your side and ready to support you, so talk to one today with First Quote Health.