How to Pick a Health Insurance Plan
As the old saying goes, health is wealth. However, even the healthiest person in the world can get sick from time to time. This is why health insurance is so vital for everyone regardless of how healthy or how financially well-off they are. One can never really know or predict how much one will have to pay for hospital treatment so having insurance to cover you is a great precaution. We receive this question many times from our readers as they suffer from unfortunate physical ailments and want to ensure they have maximum protection for the most affordable price. For example, if you are suffering from Achilles Tendonitis or Plantar Fasciitis, you definitely would prefer a health insurance plan which can offer you orthopedic services such as physical therapy, surgery, and post-surgery support if absolutely needed, physiotherapy, and much more.
For those new to the world of insurance though, choosing the right health insurance might seem much too complicated, with industry jargon being thrown around and plan options being offered here and there. Insurance companies typically have different health plans available, and this article will explore the different types, what they entail, and their benefits.
4 Main Health Insurance Plan Types
Health Maintenance Organization (HMO)
This is one of the more popular types of plan. HMO is a type of health insurance that general has limited coverage in terms of access to doctors since one will only get doctors who work or are in contract with the plan.
Basically, one will have a primary care doctor within the network who will be at one’s service for any health-related problems. If ever one needs specialized care, one’s primary doctor can write a referral for a specialist who must also be on the plan’s network. In cases where one goes to a doctor outside of the network, one will have to shoulder the hospital bill on one’s own. There is an exception for women who wish to visit an OB/GYN. They aren’t required to get a referral for routine healthcare services.
While choosing an HMO plan is the less costly option, it can be quite restrictive for some people. After all, the plan will only cover the services of the health providers in its employ. Moreover, this plan could also require one to live in the insurance plan’s service area so one can avail its coverage.
HMO is generally focused more on prevention and wellness.
Plans Preferred Organization (PPO)
This is also quite a popular option, but it’s typically more costly than HMO. A PPO health plan offers more choices and flexibility. It covers the health services of those in the network and outside the PPO’s network. However, one will have to pay a bit more outside network care.
Additionally, one won’t need a referral if ever one needs to go to a new doctor or specialist. PPO plan won’t be providing one with a primary care provider like in HMO though.
Despite its many benefits, a PPO plan also has its fair share of drawbacks. For instance, not having a primary care provider can be a disadvantage since one might have a hard time getting the right healthcare one needs based on one’s history. With a primary care provider, one would have a doctor who’d be working closely with the individual who could help them in understanding one’s health status.
Another disadvantage is that in this plan, premiums (the monthly cost for the insurance) end up costing higher than in other insurance plans. Moreover, if one does visit a doctor outside of the plan’s network, one will have to pay a higher deductible too. If you suffer from skin or hair conditions, you can explore this particular plan in greater detail.
Basically, with a PPO plan, one will have a moderate amount of freedom when it comes to choosing a healthcare provider, but one will have to pay more and have to file more paperwork, especially for out-of-network providers. The PPO plan will reimburse one for visiting doctors outside the company’s network but only partially, which is better than not getting reimbursed at all like in other plans like HMO.
Exclusive Provider Organization (EPO)
One can consider this plan type to be a combination of HMO and PPO. Like in an HMO plan, one has to stay within the company’s network of healthcare providers but, like in PPO, one won’t be provided with a primary care provider. One is required to use the hospitals, doctors and other healthcare providers within the network otherwise one won’t be covered by the insurance company.
An advantage to this plan though is that one won’t have to get a referral in order to see a specialist or doctor. Also, one of EPO’s main advantages, this plan costs much less than an HMO or PPO plan. Of course, the caveat is that one is limited to the plan’s network of healthcare providers.
It’s worth noting that an EPO plan will usually cover the costs of out-of-network care in true health emergencies. This is particularly true if one has to have an ambulance to the nearest hospital for immediate care. Additionally, if one is admitted to the hospital, one’s insurance plan will still cover the bill.
However, insurance companies do have certain considerations when it comes to what classifies as a true emergency. Generally, it’s only a true emergency if not treating the individual immediately would cause permanent damage or risk the person’s life. Injuries or illnesses that aren’t considered true emergencies and treated in an out-of-network doctor would mean one has to pay the full price without the aid of the insurance plan.
This type is also a hybrid of an HMO plan and a PPO plan. However, this plan is similar to HMO in that it requires members to have a primary care provider from its in-network list of doctors. And it’s similar to PPO because one has some freedom in receiving certain services out-of-network.
However, if one does go out-of-network, one has to get a referral from their primary care provider otherwise one will have to shoulder most of the costs for the healthcare service. And if it’s one’s primary physician that refers one to an out-of-network health care provider, the POS plan will generally reimburse most of the cost.
Essentially, one is given more choices in this plan, but it’s still much more advantageous if one sticks to the insurance company’s network.
POS plans aren’t as common as HMO and PPO, but one can actually save money on premiums much better with this plan.