Last Updated on August 13, 2023 by asifa
Recent research suggests that a stay in intensive care could cost as much as $10,000 per day. That’s enough to send chills down the spine of everyone but the wealthiest individuals.
Nowadays, the possibility of having to spend time in one of these high-care facilities is at an all-time high too.
If you’re worried about having to pay for your medical expenses on your own, you should consider these different types of health insurance to put your mind at ease.
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The Main Kinds of Health Insurance
There are two main types of health insurance overall. These are public and private.
The federal government offers the first type, and you get private health insurance from an insurance company or your employer.
Public Health Insurance Options
Public health insurance plans offer medical treatment at a reduced cost thanks to government funding. Members of these healthcare programs still pay monthly premiums and some costs, such as deductibles and out-of-pocket expenses.
There are three main types of government-funded health insurance. These are:
Medicare’s available to all US citizens over the age of 65. There are four main types of Medicare:
- Part A pays most of the costs for hospital care, nursing facility care, and home health care
- Part B covers preventive care, extra doctor’s services, outpatient care, and medical supplies
- Part C for Medicare Advantage plans offered by private insurers
- Part D that pays for prescription drugs
You can also get supplementary insurance options via Medicare to cover some of your extra expenses.
The different parts of Medicare have varying premiums and separate enrolment periods. Unless you make alternative arrangements, you’re automatically enrolled in Medicare on your 65th birthday.
Most people contribute to Medicare costs while they’re employed and enjoy premium-free membership of this scheme.
Medicaid is another federal healthcare initiative for vulnerable and low-income Americans. It provides very low-cost healthcare coverage and long-term care for people who genuinely can’t afford it.
You’ll need to meet certain financial criteria to qualify for Medicaid.
The Children’s Health Insurance Program is basically Medicaid for children under the age of 18. Medicaid and CHIP are state-run, so the requirements for enrollment and benefits may vary from place to place.
Different Types of Health Insurance From Private Insurers
Whether you get health insurance from your employer or buy it from a private insurer, usually via the ACA marketplace.
Each private healthcare plan must cover ten basic health benefits.
- Outpatient services
- Prescription drugs
- Pediatric services including vision and dental care
- Preventive care
- Laboratory services
- Emergency care
- Hospitalization for any reason
- Mental health and substance use disorder services
- Habilitative and rehabilitative services
- Maternity, pregnancy, and neonatal care
In addition to these basics, the insurer can provide whichever additional benefits they want. When you choose health insurance, you’ll always pay more if you want more benefits. So if you get your crown fitted by the best dentist in Marlborough, make sure you know your insurance covers that.
That said, individual health insurance options are often more affordable than group insurance plans.
There are four major varieties of private health insurance offered by both group and individual insurers. These are:
HMO – Health Maintenance Organization Plans
These plans use a primary care provider as your main source of medical assistance.
You need to choose your primary care provider from a list of options when you sign up. You always need to visit these professionals first before you see a specialist.
HMOs usually cover a wider range of preventive services than the other plans, offer lower premiums, and don’t usually charge a deductible before coverage starts. Enrollees will usually need to contribute a copayment.
Coverage doesn’t extend outside of the HMO network without prior authorization.
PPO – Preferred Provider Organization Plans
When you opt for a PPO, you don’t need to specify a primary healthcare provider at the outset. However, if you want to use medical services outside of the network, you’ll need to pay higher premiums.
There’s an annual deductible before your insurer starts paying your medical bills and you might also have to contribute a certain co-payment or co-insurance toward treatment.
You’ll also pay higher out-of-pocket costs for services outside the network.
EPO – Exclusive Provider Plans
EPOs are like HMOs in many ways. With exclusive provider plans, you can also only see doctors within the network, but you don’t need a referral to do so.
Co-payments are cheap with these types of plans, but you may need to reach a deductible before cover starts, depending on the plan chosen.
This is an affordable choice when it comes to monthly premiums, but it gets expensive in the event of unplanned medical treatment.
POS – Point-Of-Service-Plans
POS coverage combines some benefits of both HMO and PPS pans. With these plans, you need to choose a primary care physician upfront and get a referral for specialist treatment. You’ll also need pre-authorization for certain medical procedures.
You may receive higher coverage if you use services referred by your PCP, but you’ll pay a deductible if you use the services of an out-of-network provider.
With these plans, you might have to pay for your treatment upfront and then submit a claim for reimbursement.
Indemnity Health Plans
These fee-for-a-service plans pay pre-determined costs toward healthcare for their members. They may contribute a certain amount of money or a percentage of the total amount depending on the services you use.
Members usually have to comply with deductibles as well as coinsurance payments. With these plans, members also pay upfront and then claim the covered amount back from their insurer.
Make the Best Choice for Your Needs
Of all the different types of health insurance, the best one for you is the one that offers a range of services that suits your individual needs.
Medical care’s an expensive problem if you don’t have coverage, so it’s well worth putting up with all the extra charges and requirements put in place by health insurers.
If you’re curious about other health-related topics, browse some more of our articles.