The health insurance market is full of different types of plans, and each has its own unique features. There are four main types of health insurance policies: HMOs, PPOs, EPOs, and POS. Your choice will influence the amount of out-of-pocket costs and the doctors you can see.
Health Maintenance Organization (HMO)
Health maintenance organizations (HMOs) are businesses that offer their subscribers insurance coverage through a network of healthcare providers.
HMOs are typically characterized by paying monthly or yearly premiums for insurance coverage. HMOs tend to have lower premiums because patients are directed to in-network health providers, but the disadvantage is that subscribers are limited by the HMO network when choosing a provider.
Preferred Provider Organization (PPO)
Preferred provider organizations (PPOs) are insurance plans in which medical professionals and facilities provide reduced-rate services to PPO subscribers. A preferred provider or an in-network provider is a healthcare provider included in this network.
A PPO plan gives subscribers the option to see out-of-network doctors, but at a higher cost.
Exclusive Provider Organization (EPO)
Exclusive provider organizations (EPOs) are a cross between HMOs and PPOs. Specifically, you can receive services only from members of a certain network if you have an EPO. However, exceptions are made for emergency care situations.
An EPO plan may also require you to select a primary care physician (PCP). You will receive preventative care from this general practitioner, as well as treatment for minor illnesses. Furthermore, with an EMO plan, you usually do not need a referral from your PCP to see a specialist physician.
Point-of-Service (POS) Plan
When subscribers sign up for a point-of-service plan (POS), they receive different benefits based on whether they choose preferred providers (in-network providers) or outside providers (out-of-network providers). POS plans combine features from both HMOs and PPOs.
How Individual Health Insurance Works
Employer-sponsored health insurance is the norm in the US. However, due to the Affordable Care Act (ACA) an individual health insurance policy is another option if you do not qualify for an employer-sponsored policy or if your company-sponsored policy is too expensive or limited for your needs.
Nowadays, you can browse individual private health insurance plans that are comparable to most employer plans. In many situations, family or individual health coverage may cost less than what is offered through an employer. Another benefit is the law requires that all ACA plans cover anyone who applies, which means you’re never at risk for a denial.
Here are some keywords to know when you’re considering a private plan:
- Deductible. The amount you must pay before your health insurance plans covers the medical costs. You should consider a lower deductible if you believe you’ll have a lot of healthcare expenses.
- Network. The hospitals, healthcare providers and labs that your insurance provider has negotiated lower rates with to provide healthcare services.
- Providers. Your doctors—both primary care and specialists—which you should confirm if your chosen healthcare provider is in-network.
- Prescriptions: Medication your doctor prescribes you. Depending on the plan, copays or coinsurance may differ for covered prescriptions so make sure you understand how your prescriptions are covered by the plan.
How to buy health insurance
This article will explain the step by step process to purchase a private healthcare plan.
Step 1: Choose your health plan marketplace
Healthcare.gov. As a result of the Affordable Care Act (ACA), the Health Insurance Marketplace was created in 2014. For more information about the options for health insurance coverage that are available where you live, you can visit the Health Insurance Marketplace website. A specific open enrollment period exists for the website from November 1 to December 15 every year, although various events may force the open enrollment period to be extended or reopened. Special Note: On Jan. 28, 2021, President Joe Biden signed an executive order (and an extension in March) to implement a Special Enrollment Period, reopening the federal insurance marketplace from February 15 through August 15, 2021.
Despite being outside the period of open enrollment, an individual may be eligible to purchase healthcare coverage through an exchange plan if certain conditions are met. This is referred to as a Special Enrollment Period. Special enrollment periods are permitted if certain circumstances arise, such as getting married or divorced, having a child, adopting one, losing your health insurance, or experiencing a disability.
Private Health Insurance Companies. You can visit the websites of major health insurance companies in your geographic region and browse the available options. Depending on your age and the region you live in, you will be able to access a wide range of insurance plans. The plan price is the lowest available price for that plan on the website, and it assumes excellent health. Once you apply and provide the insurance company with your medical background, you will know what you will actually pay every month.
Step 2: Compare types of health insurance plans
A variety of different benefits are available with health insurance plans, consider your medical and financial needs before choosing a plan. When researching plans, you should consider the following:
- Is prescription drug coverage included in the plan? Is it limited to generic prescription drugs? How much is the co-payment?
- What is the office visit co-payment, and is there a maximum number of annual visits?
- Do you want a plan that allows you to add-on vision and dental coverage?
- If you have a PPO, how much would out-of-network services cost?
Step 3: Compare health plan networks
Doctors out of network usually don’t have agreed-upon rates, so you’re typically on the hook for a bigger portion of the bill. If you want to see your preferred doctor, make sure that they are part of your insurance network. You can always ask a provider if they accept a particular health plan.
When selecting a plan, look for one with a large network, so you have more options. If possible, eliminate any plans that do not have local doctors in their network, and those that have very few options compared with other plans.
Step 4: Compare out-of-pocket costs
The purpose of this step is to narrow down choices based on out-of-pocket costs. The out-of-pocket costs are nearly as important as the network. You should be able to see how much you’ll have to pay out-of-pocket for services in the summary of benefits for your plan. Many state marketplaces, as well as the federal marketplace, provide snapshots of these costs for comparison.
Step 5: Compare benefits
Most likely, your choices have narrowed. You can further focus your choices by referring to the summary of benefits to find out if any of the plans provide a wider range of services. There are some who may have better coverage for things like physical therapy, fertility treatments or mental healthcare, while others may have greater emergency coverage. By skipping this quick but crucial step, you may be missing out on an insurance plan that’s more suitable for you and your family.
The Bottom Line
Many people are not eligible for medicare. Getting your own health insurance policy may not be as straightforward as joining an employer’s plan but you get the benefit of more control over the plan you use. With so many options available, you can probably find a plan that suits your needs and your budget.
