What are the different types of health insurance and can I get by without it? This is a question that many people, particularly in these times are asking themselves.
As is the common answer with many types of health insurance, you don't really need health insurance until you NEED health insurance. Meaning, the insurance doesn't really do you any good until you get sick or you get injured.
In many countries across Europe, health insurance isn't a concern since the government picks up the bill if you have to go to a doctor or even to the hospital. In contrast, much of the health care cost in the United States is paid for by people and their respective health insurance plans.
There are basically three types of health insurance:
1. Self-insured or uninsured. These are people that either have no health insurance at all or have insurance, but are responsible for paying all of their premiums. It is estimated that upwards of 30% of the US population falls within this grouping.
2. Managed Care Plans. Managed Care Plans are one of the most popular types of health insurance that many people are familiar with. These networks provide services through a set of specified care providers at contracted prices. They fall into three subsets.
HMO (Health Maintenance Organization) HMOs are essentially pre-paid health plans. Members pay a set fee every month. The HMO provides an entire array of services ranging from a simple doctor's visit to going to a hospital. In many instances, the physicians are either directly employed by the HMO or contract to serve only HMO patients. One of the downsides of an HMO is that it is usually a closed network with a set group of physicians, which means that members have to go see someone that is part of the HMO.
PPO (Preferred Provider Organizations) PPOs are a group of doctors and health care facilities that provide services to everyone within the PPO. Costs are either paid for by the member then reimbursed by the PPO or are shared by the member and PPO as it is incurred. This is different than an HMO, where the health care costs are pre-paid. PPOs also generally offer the ability visit a wider array of providers both in-network and out-of-network. Â Many people who have different types of health insurance offered to them tend to opt for the PPO plan given the added flexibility
POS (Point of Service) POS plans are managed health plans that effectively bring the best of HMOs and PPOs together. Members pay little or no co-payment and no deductible as long as the care provided is within the network, similar to an HMO. However, members are also welcome to seek treatment out of the network, like a PPO, but will pay additional charges and a deductible to do so.
3. Indemnity Plan. Indemnity Plans allow members to seek out health care from wherever from whomever they want. Given the different types of health insurance available, the major benefit of this plan is the freedom of choice and flexibility, however also the most expensive health care money can buy.
While most health insurance falls in one of the categories, there are countless permutations. Each health insurance has unique coverage plans and there can be specific insurance that covers only certain parts of your health care. A great example of this is prescription drug care, which is often covered entirely separate from your general physician care. Dental and vision care are also usually covered under a separate policy and may actually be with a different insurance provider altogether. Additionally, coverage and options can depend on who your employer is.