Understanding Basic Health Insurance Variations
For many people, deciding on an insurance policy can be a struggle. Whether the insurance is for an
auto policy or a homeowners plan, the choices involved can be difficult and confusing to make.
These complications when settling on an insurance plan are made even more difficult when an
individual is deciding between health insurance policies. Health insurance is its own beast within the
already puzzling insurance industry and choosing the right health insurance plan may be a difficult
challenge for some people.
Simplifying the Process
But the process of choosing a health insurance policy can be simplified for individuals by knowing a few
of the basics involved with health insurance and by knowing what to options are available for coverage
for differing income brackets. The first thing that a prospective health insurance subscriber will want to
know is the three most common classifications of health insurance plans and the advantages of each.
The three most common types of health care plans are Health Maintenance Organizations (HMO),
Preferred Provider Organizations (PPO), and Point of Service plans (POS). Each of these will offer
advantages for individuals and one will wish to know the basics of each so that they can make the best
choice for health insurance possible.
HMO health care plans require that the subscriber use specific physicians and health care professionals
that are within the plan’s network. HMO costs are usually the cheapest plans, but will always come with
the above restrictions in physicians.
PPO policies, or Preferred Provider Organizations, also have
networks of available physicians, but they will allow the
subscriber to go outside the network for their healthcare needs
for a higher fee. PPOs are the typically right choice for those
who can afford a higher out of pocket cost because they give the
liberty of flexibility when choosing health care providers.
POS healthcare policies combine the above two plans by
allowing the subscriber to venture outside a specific network of physicians but still require the
subscriber to choose a primary care doc within their network. Once a subscriber has chosen a primary
care physician from the insurance company’s network of doctors and healthcare providers the
subscriber will typically need to receive a referral from that chosen physician before they will be allowed
to get healthcare from outside the network.
All of the above types of policies offered by health insurance companies have their own advantages and
disadvantages but the primary give and take comes from flexibility and cost. Typically, the less out of
pocket costs are attributed to the subscriber the less flexible their options in available physicians will be.
While on the other end, the more expensive forms of policies will often allow the subscriber more
freedom from established networks of physicians. While these three types of coverage are the main
choices available to health insurance shoppers, one may also wish to consider applying for Medicare.
Medicare is the governmentally supported healthcare insurance
available to those who are over 65 or who qualify through disability or
other stipulations Medicare will act similarly to other insurance
options but may still have gaps in coverage that a subscriber may wish
to fill with Medicare supplemental insurance.
Medicare supplemental insurance is offered by private insurance
companies but is designed to help a Medicare subscriber cover costs not included in Medicare coverage
such as coinsurance and copay responsibilities.
By being informed on what the main differences are between the general overlay of insurance plans, an
individual who is deciding on a health insurance policy will be able to more effectively choose an option
that is best suited for them.