Health Insurance Plans

In the United States, having health insurance is a personal responsibility and a health care necessity. The pure cost of medical visits, from simple checkups to complex surgeries, far exceeds the financial means of most of the population. Health insurance, however, puts affordable health care within reach for the masses, giving peace of mind to millions of Americans each year.

With so many different types of health insurance plans available, finding the provider and plan that is right for you can be challenging and overwhelming. As you choose between different plans, two of the main deciding factors will likely be associated cost and you individual medical need.

Some health insurance providers require a monthly premium (a monthly fee), a deductible (a predetermined, out-of-pocket amount that you will have to pay) or will only cover the cost of certain doctors. Balancing these aspects with the level of health care you need will help you choose the best, most cost-effective insurance option for you.

Low Cost, Low Need: Health Maintenance Organization (HMO)

If you have a limited budget and only a periodic need for health care, a Health Maintenance Organization (HMO) will likely meet your needs. For the cost of a small monthly premium and a minimal co-payment, you can access a variety of preventative care services, including dental cleanings and vision screenings.

With an HMO, you will need to choose a primary care physician from a limited list of “network” providers. All of your care must be coordinated through this physician, and services beyond preventative care will require your primary care physician’s referral. If you frequently require the care of specialists or if you already have a physician of choice, you may find your health care options restricted with an HMO.

Low Cost, Greater Need: Point of Service Plans (POS)

If you want the lower cost of an HMO but need more freedom to choose doctors outside of a prescribed network, then a Point of Service (POS) Plan may be a better option.

Doctors you see within the network will be available at the network rate, and these doctors can give you referrals to out-of-network doctors while still maintaining your health care coverage. You can also refer yourself to an out-of-network provider, however, you may have to pay a percentage of the cost.

This plan assumes that you will typically be satisfied with in-network care but that you may occasionally want to seek specialized care. If you regularly refer yourself to out-of-network doctors, you will find your health care costs rise substantially.

Mid-Cost, Greater Need: Preferred Provider Organizations (PPO)

Preferred Provider Organizations (PPOs) can cost slightly more in terms of monthly premiums because they offer a broader variety of health care providers as part of their coverage options. Likewise, PPOs will often cover a substantial portion of out-of-network providers so that participants have even more options than they would have through an HMO or a POS plan.

Out-of-network coverage will vary by provider, however, and PPOs will often require you to obtain approval before entering the hospital or pursuing other intensive care without a prior referral. PPOs may also have a deductible, which can vary according to each company’s policy.

Higher Cost, Greatest Need: Fee-for-Service Plans (Traditional Insurance)

The most flexible health insurance plan is the Fee-for-Service or Traditional Insurance plan. These plans typically cost a little bit more due to a monthly premium and an annual deductible. However, they allow you to see any doctor or go to any health care facility you choose, giving you the most flexibility of all health insurance plans.

While the level of benefits and out-of-pocket expenses will vary, these plans typically require more paperwork and may require you to keep track of your own expenses. Still, if you have prolonged or unusual health care needs, Fee-for-Service plans are the most cost-effective way to get the specific care you need.

Health Care and Your Future

Planning now for adequate health insurance coverage could save you time and money in the future. While it is oftentimes difficult to anticipate how much health care you will eventually need, the following factors can give you an idea:

  • whether or not you are pregnant (or planning to get pregnant in the near future)
  • your age
  • your general health
  • your high-risk factors (i.e. smoking or obesity).

If you can afford to have more comprehensive coverage, the long-term benefits could pay for themselves. By being proactive and erring on the safe side, you will insure quality, affordable health care for yourself and your family in the years to come.