Types of health insurance
When comparing health insurance plans, understanding the differences between health insurance types can help you choose a plan that's best for you.
Health insurance is not one-size-fits-all, and the number of options reflects that. There are several types of health insurance plans to choose from, and each has associated costs and limitations on providers and visits. But how do you narrow down what's best for you?
Five types of health insurance plans
There are 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 where you establish a relationship with a primary care physician (PCP). To see a specialist, a referral is typically required from your PCP for the costs to be included in the plan. Out-of-network emergencies are covered at network costs, but any other out-of-network medical expenses are 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 does not 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 do not 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 tax-free money.
What services are covered?
Regardless of the plan type you choose, all plans must cover 10 essential health benefits:
- Outpatient care
- Emergency services
- Pregnancy and newborn care
- Mental health and substance abuse services
- Prescription drugs
- Rehabilitative services
- Lab services
- Preventive care
- Pediatric care
How much of the cost is covered?
Each group is distinguished by a different ratio of financial responsibility between the insurer and the insured. The categories are:
- Bronze: Insurance pays 60%; you pay 40%.
- Silver: Insurance pays 70%; you pay 30%.
- Gold: Insurance pays 80%; you pay 20%.
- Platinum: Insurance pays 90%; you pay 10%.
- Catastrophic: Insurance pays 100% after you meet a high deductible. You must 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.
How to get health insurance
Open enrollment for many major medical plans is typically November through December. If you have a qualifying life event (such as getting married or moving), you may be able to make adjustments outside of the designated enrollment period.
If your health insurance isn't covered through an employer, you may be able to get coverage through the marketplace. To get ahead of the game, check your current healthcare plan to review your coverage and understand your plan. And, check out www.healthcare.gov for more specific healthcare plan information.