Selecting the right health insurance policy can feel like a daunting task but it is one of the most important decisions you’ll make about your health and financial health. As medical care continues to rise in cost, the appropriate health insurance will ensure you and your family get the services you need without going broke. In this guide, we show you the various types of health insurance you could get, the things you should think about when selecting a plan, and how to identify the best choice for your needs.
What Are the Top Health Insurance Plans?
That said, the best health insurance plans offer broad coverage while also accommodating your individual needs and budget. Health insurance plans are intended to provide coverage for certain medical expenses, such as doctor visits, hospital stays, surgeries, prescriptions, and preventative care. The best health insurance plan will provide value at the same time through low premiums, low out-of-pocket costs, and a large network of healthcare providers.
In this guide, we will cover different types of health insurance plans and cover some of the best in the market. We’ll also share some tips to help you choose a plan that fits your healthcare needs.
Health Insurance Plans Types
Before getting into what health insurance plans are the best, it’s important to know what types of plans are available. Each plan has its specific benefits, coverage and costs.
Health Maintenance Organization (HMO) plans
One of the most common types of health insurance is an HMO plan, as it has lower premiums and out-of-pocket expenses that are easier to manage. However, HMO plans do have some restrictions. If you need to visit a specialist, you’ll generally have to get a referral from your PCP.
Pros:
Reduced premiums and out-of-pocket expenses
Health systems with emphasis on prevention and comprehensive care
A single point of contact for most health needs, managed care
Cons:
May restrict choice of healthcare providers
You need a referral for specialist visits
No coverage outside of the network (except in emergencies)
Best for: Those who would rather have a plan with lower costs with a network of providers and don’t mind staying in-network.
What is a Preferred Provider Organization (PPO) Plan?
Unlike an HMO plan, a PPO plan will have more flexibility. With a PPO, you don’t need a referral to see a specialist, and you can go to any health care provider, although you’ll pay less if you use in-network providers. PPOs also cover some care that is provided by out-of-network providers.
Pros:
The ability to see any doctor or specialist without obtaining a referral
Access to out-of-network care (but at a higher cost)
A wider range of healthcare providers to select from
Cons:
Larger premiums and out-of-pocket expenses than HMO plans
Higher possible out-of-network care cost
Higher deductibles and copays
Best for: Those who want to choose their doctors and specialists, with the trade off of paying a little more.
EPO (Exclusive Provider Organization) Plans
An EPO plan is like a PPO with a more assertive network policy. You don’t need a referral to see a specialist, but EPO plans don’t cover any out-of-network care, except in emergencies. This can offer you savings if you are okay with a limited network of providers.
Pros:
You do not need referrals to see specialists
Lower premiums than PPO plans
No out-of-network coverage (except in emergencies)
Cons:
Teresa’s situation is not unique; many have limited choices when it comes to healthcare providers.
Except in emergencies, no out-of-network coverage
Higher out-of-pocket costs for out-of-network care
Best for: People who want flexibility with specialists but are willing to stay within a set network of providers.
Point of Service (POS) Plans
A POS plan is something between an HMO and a PPO plan. You have a Primary Care Physician (PCP) who coordinates your care, but no referral to see specialists. But you pay more for out-of-network care.
Pros:
The ability to visit specialists without needing a referral
Lower premiums than PPO plans
Focus on preventive care
Cons:
Bigger bills for out-of-network care
Requires a primary care physician to manage care
Limited provider network
Best for: Anyone who wants to maintain some freedom of choice for providers while still going through a PCP.
High Deductible Health Plans (HDHPs)
HDHPs, or high deductible health plans, usually come with lower monthly premiums but a higher deductible that you must pay before insurance. These plans are usually offered with Health Savings Accounts (HSAs) that let you set aside pretax funds for medical care. Although HDHPs are cheaper each month, if you visit a doctor frequently, you may have to pay a lot out of pocket.
Pros:
Lower monthly premiums
Can be combined with a Health Savings Account (HSA) to save tax-free
Good for healthy people who plan to have low medical bills
Cons:
Big deductible that has to be met before coverage kicks in
Costs are high out of pocket until the deductible is reached
May not be suitable for people who require frequent healthcare
Best for: Healthy individuals or those who don’t expect to need extensive medical care and want to save money on premiums.
Catastrophic Health Plans
Catastrophic plans cover worst-case scenarios say, a major accident or serious illness. These plans have low premiums and high deductibles, so they apply only after you’ve spent a certain amount of money out of pocket. Catastrophic plans are available only to those under 30 years old or those who qualify for a hardship exemption.
Pros:
Very low premiums
Offers coverage for serious medical emergencies
Best for a healthy person under 30, or someone on a tight budget
Cons:
High deductible so you will have to pay a lot out of pocket before coverage kicks in
Only certain medical care and preventive services are covered
Not available to everyone
Best for: Young, healthy individuals who want low-cost coverage for catastrophic events but don’t expect to need much healthcare.
Health Insurance Programs: Medicare and Medicaid
Medicare: A federal program that provides health coverage to individuals aged 65 and older or those with disabilities. Medicare has parts that cover hospital stays (Part A), medical services (Part B) and prescription drugs (Part D).
Medicaid: A federal-state program that provides health coverage to low-income individuals and families. Medicaid coverage depends on the state that you live in, but for the most part, it includes hospital coverage, doctor visits, preventive care and prescription drugs.
Pros:
Includes basic care such as hospital stays, doctor visits and prescribed medications
Restriction people with disabilities or low-income individuals (Medicaid) and seniors (Medicare)
Cons:
Restricted to individuals with certain eligibility criteria
Medicaid coverage differs by state
Medicare has a range of out-of-pocket costs, including premiums, copays, and deductibles
Best for: Seniors, individuals with disabilities, and low-income families who qualify for government assistance.
Considerations for Choosing an Ideal Health Insurance Plan
Selecting the right health insurance policy for your needs can be complicated. To help you narrow down your options, here are a few factors to consider:
Premiums and Deductibles
You pay your premiums monthly and will also have a deductible — the amount you pay before your insurance kicks in. Plans with higher premiums typically have lower deductibles and vice versa. Think about how much you can afford to pay each month but also how much you’re willing to pay when you go for medical care.
Out-of-Pocket Costs
Beyond just premiums and deductibles, think about other out-of-pocket expenses, such as copayments the fees you must pay for some appointments, tests or treatments and the maximum out-of-pocket limit. Look for a plan that balances affordable monthly premiums with reasonable out-of-pocket costs.
Network of Providers
Verify that your preferred doctors, hospitals and pharmacies are in the plan’s network. If you have already established relationships with certain healthcare providers, it’s important to select a plan that has them in-network (relatively inexpensive), in order to minimize any potential out-of-pocket costs.
Covered Services
Check the plan’s coverage to make sure it covers your health care needs. Does it include prescription drugs, mental health services, maternity care and preventive screenings? Make sure to check for exclusions for services you may require.
Flexibility and Convenience
For example, think about how much flexibility you want when it comes to choosing your healthcare providers. Do you want flexibility to see specialists without a referral; is a PPO plan the best way to do this? If you want a more managed care option with lower premiums, an HMO or a POS plan might be a better choice.
Reputation and Customer Service
You should also consider a reputation for customer service from the insurer. You will need to partner with a company that is responsive, easy to reach out to, and willing to make sure you know what your plan and benefits are.
Conclusion
Read How to Pick the Best Health Insurance for You and Your Family Whether you need a low-cost one (HMO), a flexible one (PPO), or you need a high-deductible one for an option to contribute to an HSA, there is a plan out there that suits your lifestyle and gives you the coverage you want.
When choosing a health plan, you should educate yourself on the types of health insurance plans, determine the details that matter most to you and do adequate research so that you can confidently choose a plan that offers the most affordable option with the right coverage and convenience. Once per year, you should review your options to make sure you have the best health insurance plan for your changing needs.
