If you need medical coverage, you can choose from several types of health insurance. The type of coverage you choose depends on your budget and the kind of care you need.
Most health plans include a deductible. A deductible is a fixed amount of money that the insured must pay out of pocket before the health insurer will start paying its share. For instance, an emergency room visit costs $200, but if you have a deductible of $7500, you will only have to pay $500 before your plan starts to cover the rest of your bill.
Depending on the type of plan you select, you may also need to pay a co-payment. Co-payments are flat fees that are paid each time you receive a specific service, such as a doctor’s visit. Some policies do not apply a co-payment against the deductible, but they do require you to make a co-payment for services provided by a provider outside of your network.
Deductibles are often used to encourage employees to use a particular medical provider, such as a hospital or a doctor. In some cases, you can choose your own physician, but most policies require you to use a primary care physician. Those who use a PCP may enjoy higher levels of coverage.
You can also find a health insurance plan that covers preventative care. This type of coverage reduces your risk for developing serious health problems. It can consist of an annual exam, screenings, or recommended testing.
Health maintenance organization (HMO) plans are a relatively inexpensive type of health insurance. They offer a wide range of medical services and have a contract with a network of approved providers. These contracts are often cheaper for in-network physicians and hospitals than for out-of-network providers. However, HMOs also require the insured to pay a portion of the cost.
Preferred Provider Organization (PPO) plans are one of the more common health plans offered by employers. They are similar to an HMO, but the insured is not required to use a specific provider. In addition, the insured has the option to see any medical provider, though the insurer usually pays a higher rate for preferred providers.
An indemnity plan is a supplemental insurance policy. These plans are designed to help people who are uninsured obtain adequate resources for their medical care. These plans allow the patient to choose a doctor or medical specialist from a network of providers. Although most indemnity plans do not qualify for the minimum essential coverage provisions of the Affordable Care Act, they are considered a very good alternative for those who need insurance.
High-deductible health plans are another type of health insurance. Like the PPO, these plans encourage the use of a network of preferred doctors and hospitals. Unlike the PPO, however, high-deductible plans require the insured to pay a higher percentage of the costs. Higher deductibles can also lead to more expensive out-of-pocket expenses.
Some health plans offer discounts on certain health products and well-being programs. For example, some plans provide a cash reimbursement for time missed from work because of a serious illness or injury. Others may offer income benefits if you take an extended time off to care for a child.