Health insurance is not one-size-fits-all, and the number of options reflects that. But how do you narrow down what’s best for you from all the types of health insurance?
First, know what you’re looking for: There are both health insurance categories and health insurance types, and most people need to pick one of each. Health insurance categories refer to how you and your plan share costs, and health insurance types determine how you can use that coverage. Here’s a review.
Health insurance categories: Determine your insurance coverage
The key categories of health insurance are often divided into five groups. Each group is distinguished by a different ratio of financial responsibility between the insurer and the insured. The categories are:
- Bronze: Insurance pays 60 percent; you pay 40 percent.
- Silver: Insurance pays 70 percent; you pay 30 percent.
- Gold: Insurance pays 80 percent; you pay 20 percent.
- Platinum: Insurance pays 90 percent; you pay 10 percent.
- Catastrophic: Insurance pays 100 percent after you meet a high deductible. You have to be under age 30 to enroll.
The more insurance pays for medical expenses, the higher the monthly premium. Some people opt for a category such as Bronze or Catastrophic if they don’t anticipate many medical expenses. For those who frequently visit the doctor, foresee a big medical event or require a number of medications, a category such as Silver, Gold or Platinum may be a better fit.
Health insurance types: Determine your insurance use
There are also five main types of health insurance plans. They differ primarily in the doctors that you can see and the types of medical care that are covered. The health insurance types are:
1. Health Maintenance Organization (HMO)
HMOs usually limit coverage to a specific network of doctors you must use in order for the costs to be included in the plan. You establish a relationship with a primary care physician (PCP), and you must get a referral from your PCP to see a specialist in order for the costs to be included in the plan. Out-of-network emergencies are covered at networks costs, but any other out-of-network medical expenses are 100 percent your responsibility.
2. Preferred Provider Organization (PPO)
A PPO is a type of health plan where you pay less if you use providers in the plan’s network and doesn’t require a referral to see a specialist. You can use doctors, hospitals and providers outside of the network without a referral for an additional cost.
3. Exclusive Provider Organization (EPO)
Similar to an HMO, you have to pay full cost for out-of-network services (except emergencies), but you may have more in-network options and you don’t need referrals for specialists.
4. Point of Service (POS)
With a POS plan you pay less if you use doctors, hospitals and other health care providers that belong to the plan’s network. POS plans require you to get a referral from your primary care doctor in order to see a specialist.
5. High Deductible Health Plans (HDHP)
An HDHP has a higher deductible than a traditional insurance plan and higher yearly out-of-pocket expenses. HDHPs can be combined with a Health Savings Account (HSA), allowing you to pay for certain medical expenses with money free from federal taxes.
Regardless of the plan type you choose, all plans must cover 10 essential health benefits: outpatient care, emergency services, hospitalization, pregnancy and newborn care, mental health and substance abuse services, prescription drugs, rehabilitative services, lab services, preventive care and pediatric care.