Different Types of Health Insurance Plans | eHealth
Whether you’re buying insurance for yourself and your family or owning a small business, you have options in your selection of health plans. Understanding the different types of health insurance plans that are available to you can help you choose the health insurance plan that best fits your budget and coverage needs.
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major medical health plans and metallic categories
If you’re shopping for health insurance in the federal or state marketplace, or from a private brokerage firm or exchange, such as ehealth, you’ll find that the plans offered are classified by metals: bronze, silver, gold, and platinum.
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All of these plans comply with the Affordable Care Act (commonly known as Obamacare) and provide coverage for all 10 categories of essential health benefits, and all plans have a maximum out-of-pocket limit. in 2022, most consumers with an individual plan will have to contribute toward their health care costs will be $8,700, with the limit set at $17,400 for coverage for more than one person.
Beyond that common feature, each plan has its own premium and cost-sharing arrangement, which varies from plan to plan, even when multiple plans are offered by the same insurer. The premium is the amount you pay (usually monthly) in exchange for health insurance. cost sharing refers to the portion of eligible health care expenses that is paid by the insurer and the portion that you pay out of pocket. your out-of-pocket costs may include deductibles, coinsurance, copays, and the full cost of health care services not covered by the plan.
Metal labels for major health plans tell you the average value of different health insurance plans—that is, how much of the expected medical cost the plan will pay for the entire population enrolled in the plan.
- a bronze plan will cover approximately 60% of costs; you will pay about 40%
- a silver plan will cover approximately 70% of costs; you will pay about 30%
- a gold plan will cover approximately 80% of costs; you will pay around 20%
- a platinum plan will cover approximately 90% of costs; you will pay around 10%
- critical illness insurance, which pays you a lump sum if you are diagnosed with cancer, heart attack, stroke, and other serious illnesses
- accident insurance, which gives you a cash payment in case of covered accidents (separate from your auto accident coverage)
- fixed-benefit indemnity health insurance, which provides cash payments if you suffer from specific illnesses or injuries covered by your policy
Generally, the more coverage a plan provides, the higher your premium. To illustrate how this principle works with metal levels, consider the national average metal health insurance premium (for a 40-year-old) in 2022 as reported by the Kaiser Family Foundation:
Understanding how your coverage level compares to your premium and out-of-pocket costs gives you basic information you can refine to decide which plan best suits your needs. Your actual premium cost will vary based on your age, location, the number of people you cover, the insurer you select, and whether you qualify for Affordable Care Act (ACA) subsidies to reduce your costs.
managed care: hmo, epo, pos, ppo, and other types of health insurance plans
Most major health plan benefits are designed to link benefits to the use of health care providers participating in the plan. Therefore, it is a good idea to understand the difference between a health maintenance organization (hmo), an exclusive provider organization (epo), a point of service plan (pos), and a preferred provider organization (ppo). .
health maintenance organization (hmo) plans
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hmos is one of the most popular types of health insurance you can buy. With this plan, an entire network of health care providers is committed to serving you. You must select a Primary Care Provider (PCP) to coordinate all of your health care and services.
Hmos generally offer coverage for most types of preventive care, including visits to specialists, but visits to specialists are only covered when your PCP makes a referral. In addition, you will pay copay fees for each non-preventive medical visit and may have an annual deductible. HMOs are generally best suited for individuals and families who plan to see their primary care doctor regularly for checkups and other health concerns. since 2014, the popularity of hmo plans has increased significantly.
preferred provider organization (ppo) plans
With a ppo plan, you and your family can see any health care provider in the insurance company’s network, including specialists, without a referral. In most cases, you do not need to choose a primary care doctor or get referrals to see specialists. You’ll generally have copays for any non-preventive health care you receive, and you may have an annual deductible. people who visit a specialist regularly generally prefer this type of health insurance. since 2014, the popularity of ppo plans has declined.
exclusive provider organization (epo) plans
With an EPO plan, you have access to all health care providers within the EPO network, including specialists. While PPO plans may offer you some coverage outside of their network, EPO plans generally won’t (except in emergencies). EPO plans may be a good fit for people who don’t mind being limited to in-network providers and who don’t want to coordinate their care through a primary care physician. since 2014, the popularity of epo plans has increased.
point of service (pos) plans
pos plans are a hybrid of hmos and ppos. With a POS plan, you’ll typically need to designate a primary care physician for regular checkups and referrals. but you can also use out-of-network providers if you are willing to pay more out of pocket; Usually, you’ll also have a copay and a deductible. this type of plan is versatile and may be suitable for people who are willing to pay a little more for greater flexibility.
high deductible health plan (hdhp) plans
high deductible plans cross categories. some are ppo plans while others may be epo or hmo plans. This type of health insurance has a high deductible that you must meet before your health insurance coverage kicks in. These plans may be suitable for people who want to save money with low monthly premiums and don’t plan to use their health coverage extensively. HDHPs are often combined with a Health Savings Account (HSA). If you already contribute money to an HSA, you can purchase an HSA-compatible health plan. Money contributed to an HSA can be saved on a pre-tax or tax-deductible basis to pay for qualified medical expenses, including annual deductibles.
short-term health insurance plans
Short-term health insurance plans do not comply with the obamacare law. however, if you missed the obamacare open enrollment period, a short-term health policy may provide some level of coverage in the meantime.
Short-term insurance offers more limited benefits than major medical insurance, but can help protect your finances in the event of a covered illness or accident. The downside to this type of coverage is that it does not meet the minimum essential coverage required by the Affordable Care Act, so it may also be subject to the tax penalty.
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Also, short-term plans may exclude coverage for pre-existing conditions. short term insurance is non-renewable and does not include coverage for preventive care such as physicals, immunizations, dental or vision. Please note that some states and insurance companies may limit your ability to apply for short-term plans on a consecutive basis.
differential insurance plans
gap insurance plans are designed to provide an emergency safety net for unexpected medical costs or other costs you may face in the event of a medical emergency. If you don’t have a major medical policy, you may want to get gap insurance to get coverage for serious health problems. but you can also get gap insurance, even if you have a major medical or short-term policy, as an add-on to provide extra protection.
gap insurance includes products such as:
catastrophic medical insurance
Another type of health insurance that carries a modest premium cost is catastrophic coverage. is available in and out-of-market to people under 30 and people over 30 who qualify for a hardship/affordability exemption (meaning that due to unaffordability of coverage, economic hardship, or other hardship, such as death of a family member – the person is not required to maintain health insurance coverage)
ancillary dental and vision plans
The insurance plans described so far (major medical, short-term, and catastrophic) typically do not cover routine dental or vision care. therefore, you may need to add separate plans for that type of care. To get coverage for dental exams, x-rays, cleanings, and fillings, you’ll need to choose a dental plan. dental plans may also cover more specialized services, such as orthodontics, periodontal treatments, veneers, bonding, dentures, and others.
For coverage of eye exams, eyeglass frames and corrective lenses, contact lenses, and other eye-related care, you should consider adding a vision plan. Keep in mind that a vision plan may be more critical depending on the age of you or your family member, even if you’ve never needed vision correction before.
find the right insurance plan for you
To learn more about how you can save on individual and family health insurance, use our online tools to compare plans. If you are a small business owner interested in group health insurance options, visit eHealth’s small business resources or speak with one of our licensed health insurance agents who can provide additional guidance and recommendations on how to find the right plan. optimal for you, your family or your employees.
This article is for general information and may not be updated after publication. consult your own tax, accounting, or legal advisor rather than relying on this article as tax, accounting, or legal advice.