Understanding Kinds Of Health Insurance Avaible
In the United States, there are about five different types of health insurance available: traditional health insurance; preferred provider organizations/PPOs; point-of-service plans/POS; health management organizations/HMOs; & most recently, health savings accounts/HSAs. With so many types of health insurance, it may be confusing trying to figure out which one best fits your needs, so thoroughly research each & speak with a professional if you need clarification.
Traditional health insurance is the one that most people think of when they think of health insurance. You pay the insurance company a premium every month, & if you have an accident/need for health coverage, you have a deductible amount you must pay & then the insurance company picks up the rest of the bill. You often have an inexpensive office & prescription co-pay with traditional health insurance.
With people living longer, health insurance companies began to look for more ways to reduce their costs, developing different health plans such as PPOs. PPOs are plans which will cover nearly all of your medical expenses as long as you stay within a preferred network of physicians / hospitals. This network creates a "preferred provider" list that you can choose from. Treatment outside this network of providers is covered but only at a reduced rate, meaning you end up paying more to see a physician outside the network. By limiting the physicians & hospitals covered in their network, the insurance company can control, to an extent, their costs & lower your premiums. POS plans work like PPOs, but require you to have a primary care physician through whom you can receive referrals for specialists. If you need to see a neurologist / a dermatologist, you must first visit your primary care physician for an initial diagnosis in order to receive a referral to a specialist for a more thorough diagnosis. POS plans also have a preferred provider network, & if you choose to visit a specialist / physician outside that network, your coverage will be limited.
HMOs combine a stricter version of PPOs & POS plans. HMOs have a defined list of physicians, often much smaller than PPO networks, which you may see. You will not be covered at all if you see a physician outside your HMO network. Furthermore, you must also get a referral from your primary care HMO physician to see any specialist. However, these restrictions mean that you pay an extra low / no monthly premium.
HSAs were recently signed into law by President Bush. You can deposit money into a special non-taxed, interest-gaining savings account that must be used for medical expenses. The ideal situation for an HSA is to combine the account with a low-cost, high-deductible insurance plan. The savings account is designed to allow you to cover the high deductible if you find the need to cover expensive medical costs while the insurance company will pick up the rest of the bill.
Again, it is important to carefully consider each option before choosing a single health insurance plan. Your health is important-make sure it is protected in the best way possible.
