The Different Types of Health Insurance Plans That Exist Today

Healthcare costs in the United States have been climbing for the past several decades.

Projections show that the country will spend 6.2 trillion dollars on healthcare costs by the year 2028. And in 2019, the average annual spending per person was $11,582.

With those kinds of numbers, it is easy to see why health insurance is so important. It provides peace of mind and financial protection. It is important to pick a plan right for you.

Here are the most popular types of health insurance.

Preferred Provider Organizations (PPOs)

A Preferred Provider Organization is a type of health insurance plan that is an arrangement between medical providers and insurance companies.

These medical providers are “preferred providers” and offer their services to the policyholders at a discounted rate.

This plan offers discounted coverage for in-network care and some coverage for out-of-network care but can be more expensive than other plans upfront. PPOs are the most accepted type of plan in the health care industry.

Health Maintenance Organizations (HMOs)

A Health Maintenance Organization (HMO) plan is often the most affordable of health insurance. It is a type of plan that limits coverage to providers that work for the HMO.

HMOs usually do not cover out-of-network care (unless it is an emergency) and are sometimes limited to a service area.

HMOs often have low upfront costs and deductibles but are the most restrictive in choosing your provider.

Exclusive Provider Organizations (EPOs)

An Exclusive Provider Organization (EPO) is a bit of a hybrid between a PPO and HMO. Like an HMO, it requires you to use a provider within its network, but like a PPO, you do not need a referral to seek care from a specialist.

Like an HMO, you are responsible for out-of-network care costs with an EPO.

Point-of-Service Plans (POS)

A Point-of-Service (POS) plan is a hybrid plan of a PPO and an HMO. In a POS, you can choose to use either PPO or HMO services each time you see a health care provider.

The POS rules are generally similar to HMOs but offer a little more flexibility when going out of network.

Health Savings Accounts (HSAs) and Other Types of Health Insurance

A Health Savings Account (HSA) is a type of plan that is a little like a personal savings account, but the money in a HAS is set aside for paying for health care expenses.

The two main advantages to a HAS are the money put into the account is not taxed, and you have complete control over how and where to spend your health care dollars.

HSAs are usually high-deductible and are generally a good choice if you are younger, in optimal health, and do not anticipate needed specialized health care.

A High-Deductible Health Plan (HDHP) is a health insurance plan with a large deductible and generally lower monthly premiums.

Like the HSA, this is a good choice for someone who is at low risk of needing extensive healthcare coverage.

With these options, a good idea to have a separate prescription plan. This will offset the prescription cost without insurance. 

Weigh the Pros and Cons

Knowing about all of the different types of health insurance available helps give you control over your health and wellbeing.

Weighing the pros and cons of each plan will help you decide what coverage is best for you and your family.

If you would like to learn more about the healthcare industry, or wellness and fitness, check out the other articles on our website. We cover all things that affect your health.