Understanding the Many Types of Health Insurance

 

Traditional health insurance, preferred provider organizations (PPOs), point-of-service plans (POS), health management organizations (HMOs), and most recently health savings accounts (HSAs) are the five main forms of health insurance offered in the United States. Since there are so many different kinds of health insurance, choosing the one that best suits your needs may be complicated, so do your homework on each and consult a specialist if you have any questions.

The majority of people consider traditional health insurance when they think about health insurance. Monthly premiums are paid to the insurance provider; in the event of an accident or the need for medical care, a deductible is required, after which the provider will cover the remaining costs. With conventional health insurance, you frequently have to pay a small co-pay for an office visit and/or medication.

Health insurance providers were looking for more methods to save costs as individuals lived longer, creating new health plans like PPOs. PPOs are health insurance plans that, as long as you adhere to a preferred provider or hospital network, will almost entirely cover your medical costs. You can pick from a list of "recommended providers" created by this network. Therapy received outside of this provider network is covered, but only at a reduced rate, so visiting a doctor who is not in the network will cost you extra. The insurance provider may somewhat manage their expenses and reduce your rates by restricting the doctors and hospitals that are included in their network.

POS plans function similarly to PPOs but call for you to have a primary care physician who can refer you to specialists. In order to get a referral to a specialist for a more comprehensive diagnosis, you must first see your primary care doctor for an initial diagnostic if you need to see a neurologist or dermatologist. If you opt to see a specialist or doctor outside of the approved provider network for POS plans, your coverage will be restricted.

PPOs and POS plans that are more restrictive are combined in HMOs. As you may see, HMOs have a set list of doctors that is frequently significantly less than PPO networks. If you see a doctor who is not in your HMO's network, you will not have any coverage at all. To see any specialist, you must additionally obtain a reference from your HMO primary care physician. But, because of these limitations, your monthly charge is unusually low or nonexistent.

President Bush just ratified HSAs into law. You may put money into a unique, tax-free savings account that only earns interest if it is used for medical costs. An HSA should be used in conjunction with a low-cost, high-deductible health plan whenever possible. If you find yourself needing to pay for high medical expenditures while the insurance company covers the rest of the bill, the savings account is made to enable you to afford the high deductible.

Once more, it's critical to give each choice a close look before selecting a certain health insurance strategy. Make sure your health is properly preserved since it matters a lot