Health Insurance for Every Need: Understanding the Kinds Available

Health Insurance for Every Need: Understanding the Kinds Available

In the United States, there are about five types of health insurance available: traditional health insurance; preferred provider organization or PPO; point-of-service or POS plans; health management organization or HMO; and most recently, health savings account or HSA. With so many health insurance types, it can be confusing trying to find the one that best suits your needs, so do more research and talk to a professional if you need clarification.

Traditional health insurance is what people think of when it comes to health insurance. You pay a premium to the insurance company every month, and if you have an accident or need health coverage, you have a reduced amount you have to pay and then the insurance company takes the rest of the bill. You often have an expensive office and pay co-prescription with traditional health insurance.

With the long lifespan, health insurance companies began to find other ways to reduce costs, making health plans such as PPOs are different. A PPO is a plan that will cover almost all of your medical expenses during your stay in your preferred doctor or hospital network.

This network creates a list of “preferred providers” to choose from. Treatment outside of this provider’s network is guaranteed but only at a reduced rate, meaning you pay more to see a doctor outside the network. By limiting the doctors and hospitals that are in your network, insurance companies can control, to a lesser extent,

your costs and premiums. A POS plan can work just like a PPO, but you need to have a primary care physician who can accept referrals to specialists. If you need to see a neurologist or dermatologist, you should first consult a primary care physician for an initial diagnosis to receive a referral to a complete diagnosis specialist. POS plans also have a preferred provider network, and if you choose to visit a specialist or doctor outside of that network, your coverage will be limited.

The HMO combines a PPO version and a stricter POS plan. HMOs have a definite list of physicians, more often smaller than the PPO network, which can be viewed. You will not be covered at all if you see a doctor outside the HMO network. Besides, you should also seek a referral from a primary care HMO physician to consult a specialist. However, these restrictions mean that you pay a lower or less monthly premium.

The HSA was recently signed into law by President Bush. You can deposit money into a tax-free savings account and earn interest on medical expenses. A suitable condition for an HSA is to combine these accounts with a cheap and affordable insurance plan. Savings accounts are designed to allow you to cover the deductible if you need to pay for expensive medical expenses while the insurance company will take the rest of the bill.

Again, it would be best if you considered each option before choosing a health insurance plan carefully. Your health is important — make sure you are protected in the best possible way.

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