Different Types Of Health Insurance Plans | How It Works

When it comes to buying health insurance, you have several options. If you buy through your state’s Marketplace or an insurance broker, you’ll be able to choose between health plans categorized by the level of benefits they provide: bronze, silver, gold, and platinum. Bronze plans have the least coverage, while platinum policies provide the most. If you are under 30, you may be eligible for a high-deductible, catastrophic plan.

How do the plans differ? Each pays a defined portion of the costs for the typical enrolled person. The details can differ between plans. Furthermore, limits — the amount you pay before your plan covers 100% of your health-care expenditures — differ per plan, with the least priced typically having the largest requirement.

• Platinum: covers 90% on average of your medical costs; you pay 10%
• Gold: covers 80% on average of your medical costs; you pay 20%
• Silver: covers 70% on average of your medical costs; you pay 30%
• Bronze: covers 60% on average of your medical costs; you pay 40%
• Catastrophic: Catastrophic policies pay after you have reached a very high deductible ($8,700 in 2022). Catastrophic plans must also cover the first three primary care visits and preventive care for free, even if you have not yet met your deductible.

You will also notice insurance companies affiliated with the care tiers. Aetna, Blue Cross Blue Shield, Cigna, Humana, Kaiser, and United are some of the largest national brands. Each insurance brand may offer one or more of the following four common types of plans:

• Health maintenance organizations (HMOs)
• Preferred provider organizations (PPOs)
• Exclusive provider organizations (EPOs)
• Point-of-service (POS) plans
• High-deductible health plans (HDHPs), which may be linked to health savings accounts (HSAs)

Take a moment to understand how these plans differ. Knowing the different types of plans can help you choose the one that best fits your budget and meets your health care needs. To discover more about a brand’s specific health plan, consult its summary of benefits.

Health Maintenance Organization (HMO)

An HMO provides all health services via a network of healthcare professionals and facilities. With an HMO, you might have:

• The least freedom to choose your health care providers
• The least amount of paperwork compared to other plans
• A primary care doctor to manage your care and refer you to specialists when you need one so the care is covered by the health plan; most HMOs will require a referral before you can see a specialist.

What doctors you can see.

Any provider inside your HMO’s network. If you visit a doctor who is not in the network, you may have to pay the entire payment yourself. Emergency services at an out-of-network hospital must be covered at in-network rates; however, non-participating doctors who treat you in the hospital may bill you.

What you pay:

• Premium: This is the cost you pay each month for insurance.
• Deductible: Your plan may require you to pay the amount before it covers care except for preventive care.
• Copays and/or co-insurance for each type of care. A copay is a flat fee, such as $15, that you pay when you get care. Coinsurance is when you pay a percent of the charges for care, for example 20%. These charges vary according to your plan and they are counted toward your deductible.

Paperwork involved. There are no claim forms to fill out.

Preferred Provider Organization (PPO)

With a PPO, you may have:

• A moderate amount of freedom to choose your health care providers — more than an HMO; you do not have to get a referral from a primary care doctor to see a specialist.
• Higher out-of-pocket costs if you see out-of-network doctors vs. in-network providers
• More paperwork than with other plans if you see out-of-network providers

What doctors you can see. You can see any doctor in the PPO’s network; out-of-network doctors will cost you more money.

What you pay:

• Premium: This is the cost you pay each month for insurance.
• Deductible: Some PPOs may have a deductible. You will likely have to pay a higher deductible if you see an out-of-network doctor.
• Copay or coinsurance: A copay is a flat fee, such as $15, that you pay when you get care. Coinsurance is when you pay a percent of the charges for care, for example 20%.
• Other costs: If your out-of-network doctor charges more than others in the area do, you may have to pay the balance after your insurance pays its share.

Paperwork involved.

A PPO requires minimal to no paperwork if you see an in-network doctor. If you utilize an out-of-network provider, you must pay the provider. Then you must file a claim to obtain the PPO plan to reimburse you.

Exclusive Provider Organization (EPO)

With an EPO, you may have:

• A moderate amount of freedom to choose your health care providers  more than an HMO; you do not have to get a referral from a primary care doctor to see a specialist.
• No coverage for out-of-network providers; if you see a provider that is not in your plan’s network – other than in an emergency – you will have to pay the full cost yourself.
• Lower premium than a PPO offered by the same insurer

What doctors you can see. Any in the EPO’s network; there is no coverage for out-of-network providers.

• Premium: This is the cost you pay each month for insurance.
• Deductible: Some EPOs may have a deductible.
• Copay or coinsurance: A copay is a flat fee, such as $15, that you pay when you get care. Coinsurance is when you pay a percentage of the charges for care, for example 20%.
• Other costs: If you see an out-of-network provider you will have to pay the full bill.

Paperwork involved. There’s little to no paperwork with an EPO.

Point-of-Service Plan (POS)

A POS plan blends features of an HMO with a PPO. With POS plan, you may have:

• More freedom to choose your health care providers than you would in an HMO
• A moderate amount of paperwork if you see out-of-network providers
• A primary care doctor who coordinates your care and who refers you to specialists

What doctors you can see.

You can see the in-network providers recommended by your primary care doctor. You can see doctors outside of your network, but the cost will be higher.

What you pay:

• Premium: This is the cost you pay each month for insurance.
• Deductible: Your plan may require you to pay the amount of a deductible before it covers care beyond preventive services. You may pay a higher deductible if you see an out-of-network provider.
• Copays or coinsurance: You will pay either a copay, such as $15, when you get care or coinsurance, which is a percent of the charges for care. Copayments and coinsurance are higher when you use an out-of-network doctor.

Paperwork involved. If you go out-of-network, you must pay the medical expense. Then you file a claim with your POS plan to get paid back.

Catastrophic Plan

If you are under the age of 30, you may acquire a catastrophic health plan. A catastrophic health plan may include the following:

• Lower premium
• 3 primary care visits before the deductible applies
• Free preventive care, even if you haven’t met the deductible

What doctors you can see. Any in the plan’s network; individual plans may have additional rules on specialists.

What you pay:

• Premium: This is the cost you pay each month for insurance.
• Deductible: A catastrophic health plan has a deductible of $8,700 for an individual and $17,400 for a family in 2022. After you reach that deductible, the plan will pay 100% of your medical costs for covered benefits.

Paperwork involved. You will want to keep track of your medical expenses to show you have met the deductible.

High-Deductible Health Plan With or Without a Health Savings Account

A high-deductible health plan (HDHP), like a catastrophic plan, may allow you to save money on your insurance. With an HDHP, you might have:

• One of these types of health plans: HMO, PPO, EPO, or POS
• Higher out-of-pocket costs than many types of plans; like other plans, if you reach the maximum out-of-pocket amount, the plan pays 100% of your care.
• A health savings account (HSA) to help pay for your care; the money you put in an HSA is not taxed and can be used tax-free on eligible medical expenses. In order to have an HSA, you must be enrolled in an HDHP.
• Many bronze plans may qualify as HDHPs depending on the deductible (see below).

What doctors you can see. This varies depending on the type of plan — HMO, POS, EPO, or PPO

What you pay:

• Premium: An HDHP generally has a lower premium compared to other plans.
• Deductible: The deductible is at least $1,400 for an individual or $2,800 for a family, but not more than $7,050 for an individual and $14,100 for a family in 2022. Like with all plans, your preventive care is free even if you haven’t met the deductible.
• Copays or coinsurance: Other than preventive care, you must pay all your costs up to your deductible when you go for medical care. You can use money in your HSA to pay these costs.

You can use a Health Savings Account to help pay for your expenses. The maximum amount you can contribute to an HSA in 2022 is $3,650 for individuals and $7,300 for families. If you are 55 or older, you are eligible to contribute an additional $1,000.

Paperwork involved. Keep all of your receipts so you can withdraw funds from your HSA and determine when you’ve reached your deductible.

Source: WebMD