Health insurance can be a difficult concept to fully understand. Various deductibles, types of coverage, and plan benefits make it difficult to decipher on your own, especially if you aren’t familiar with what everything means. When it comes to coverage in a time of need, your main focus is on the care that is being received rather than the provider network or point of service. However, a lack of knowledge about plan coverage in the event of catastrophe could be detrimental to your finances. In an effort to help you clarify, we’ve broken down the different types of insurance plans available and who they work best for.
Health insurance plans can be divided into two main categories: indemnity plans or managed care plans.
An indemnity plan reimburses you for your medical expenses regardless of who provides the service, although in some cases your reimbursement amount may be limited. Managed care plans, on the other hand, have many more rules to follow in order to have your expenses reimbursed.
Exclusive Provider Organization
This is a type of managed care plan that strictly limits service coverage to only those providers that are within the plan’s network. This includes doctors, specialists, or hospitals, except in the case of an emergency. Usually, these types of plans are the most cost-effective but are also the most limited in the coverage that it offers. An EPO would be sufficient for individuals who do not require ongoing specialized care.
Health Maintenance Organization (HMO)
Also known as an HMO, this managed care plan limits coverage to physicians who contract with or work for the HMO. Generally, out-of-network providers are not covered, except for emergencies, and you may be required to live or work within the service area to be eligible for coverage. HMO’s were designed to focus on prevention, wellness and integrated care but the limitations to certain providers may not be ideal for your particular situation. As a step up from an EPO, this plan may work for individuals who focus on prevention and require limited specialized care.
Point of Service (POS)
Participants in this type of managed care plan pay less if they utilize providers within the plan’s network. Referrals for specialists are required from a primary care physician. This plan boasts the flexibility that many individuals require for their families and can be a good option if you know your circumstances might be changing. Point-of-Service physicians share medical data making it a great way to streamline service and allow you to change providers quickly. The government’s HIPAA Privacy Rule establishes national standards to protect your medical records and other personal health information and applies to health plans, health care clearinghouses, and those health care providers that conduct health care transactions electronically.
Preferred Provider Organization (PPO)
As one of the most flexible plans, a PPO will discount costs if an in-network provider is utilized. Out-of-network doctors and hospitals may be used for an additional cost. This is the most flexible plan and is ideal for those requiring specialized care.
Selecting the ideal healthcare plan can be difficult. Whether you seek individual or family insurance, the desired cost, and plan flexibility are all the main components of choosing the perfect plan. Alternative forms of health insurance, such as government insurance and private healthcare are also good options that are available.
About the Author:
Eileen O’Shanassy is a freelance writer and blogger based out of Flagstaff, AZ. She writes on a variety of topics and loves to research and write. She enjoys baking, biking, and kayaking. Check out her Twitter @eileenoshanassy.
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