Understanding the Different Types of Health Insurance in the U.S.
Health insurance in the U.S. can be confusing, especially during these days of ongoing changes in legislation. Choosing the coverage that’s right for you and your family is important, and the first thing to consider is the types of health insurance that are available in this country. Many people are covered through their employers, but there are other possibilities.
Two General Types of Health Insurance
There are several types of health insurance, but the two main types are:
1. Private Health Insurance
Private insurance can be purchased through an employer, a state or federal marketplace (Obamacare) or a private source, like Einsurance, an insurance provider or insurance broker.
2. Public Health Insurance
This type of insurance is subsidized by the federal or state government. That means the government pays for in coverage in part or entirely. The best known are Medicare (for people 65 and older) and Medicaid (for people with low income or disabilities). Other examples include coverage through Indian Health Service and Veteran’s Health Administration.
Health Insurance Plan Options
Another way to approach insurance is to consider how plans are administered and/or connected with healthcare providers.
1. Health Maintenance Organizations (HMOs)
HMOs, usually the least expensive type of plan, provide care directly, with in-network physicians and a coordinating primary care physician (a referring general practitioner). If treatment is sought outside of connected physicians, the insured may not be covered or will have to pay a higher fee.
2. Preferred Provider Organizations (PPOs)
PPOs allow the insured to see any doctor he or she wants, although these organizations usually have a network of approved providers with whom they’ve negotiated costs. The insured doesn’t have to get a referral from a GP to see a specialist.
3. Managed Care
An insurer in a managed care plan has contracts with a network of healthcare professionals and facilities to provide lower-cost medical care. Penalty fees and extra costs may be applied if the insured goes out of network. The more expensive policies are usually more flexible with the hospitals in the network.
These are fee-for-service plans that cover treatment by the insured’s preferred provider.
5. Point-of-Service (POS) Plans
POS plans combine many of the qualities of HMOs and PPOs. The insurer can choose to coordinate all treatment through a primary care physician, be treated within the insurer’s network of providers, or use non-network providers. Insurer costs vary depending on which choice is made, with in-network costing the least.
Want more information? Learn more and use the EINSURANCE quote generator to compare policy costs.