Overall, 15.6% of Americans do not have health insurance. Considering the expense of major procedures, or at least how dramatically preventative check ups can reduce healthcare costs, not having insurance can be a losing proposition to the pocketbook and sense of wellbeing.

With that in mind, it is vital that you have health insurance. If you don’t have it currently and may think you can’t afford coverage, or you are shopping for better insurance coverage and don’t know your options, you should understand the different types of coverage, coverage structures, and the charges you may responsible for in addition to your monthly premiums.

Types of Health Insurance

There are three types of coverage----HMO, PPO, and Fee-for-Service. Depending on whether you value more freedom in choosing providers and services or limiting personal expense to get necessary health services, one type may be more suitable for you:

• Health Maintenance Organizations (HMO): HMOs provide lower costs to the insured, but more restrictions in services in order to offer the lowered pricing. You are required to have a primary care physician whom you will have to visit first in order to obtain referrals for specialists. If your health concern can reasonably treated by your primary care physician, then you may lose the opportunity to visit a doctor with greater expertise in your specific problem.

HMOs may be best for you if you do not want to deal with some of the documentation, scheduling, and individual management that other coverage types require in order to get preferred services. Additionally, if your utmost concern is cost, HMOs do tend to offer the lowest prices.

• Preferred Provider Options (PPO): If you want more leverage in deciding when and where you procure your health services, and don’t mind some added costs for increased choices, a PPO may be ideal for you. Instead of having to wait on a referral from a primary care physician, you can be seen immediately by a specialist. However, in case you are unsure about the nature of a medical condition, you can always see any primary care physician you wish.

There may be some filings associated with some of the specialty services you obtain, and your insurance provider may not accept your claim. You will need to be clear about the limits of coverage before starting this or any type of health insurance plan.

• Fee-for-Service: This form of service is the most expensive, and the most “hands-on” for the insured. You will first have an annual limit for services you will have to pay on your own before your insurance company begins to pay all or part of your medical expenses.

Though there are fewer restrictions on the services and providers you can obtain, the process for obtaining payment for them by your insurance company amounts to reimbursement. You must file for each service with your insurance company, get your claim approved, and then obtain reimbursement. Again, the insurance company may be unwilling to pay your claim, so it is important to understand your coverage limits, especially with a more expensive Fee-for-Service plan.

To learn more about forms of health insurance, along with the terms you need to know to understand coverage limits regardless of type of plan, please see the budgeting-help.com articles on health insurance.

References


United States Department of Health & Human Services. Checkup on Health Insurance Choices

U.S. Department of Labor Employee Benefits Security Administration. An Employee’s Guide to Health Benefits Under COBRA

Author, Unknown. Types of Insurance

U.S. Census Bureau. Income, Poverty, And Health Insurance Coverage In The United States