Is there any other task more dreaded than the annual decision of selecting a health insurance plan? This chore is an amalgamation of everything we shirk from: excessive options, limited time to make a decision and uncertainty that can cost us a fortune.
Experts are of the view that there is hardly any way for a layman or financial novice to make an informed health insurance decision. The pitfalls that unemployed people and entrepreneurs face are even more dire than employed individuals because they have to opt for an insurance blindly, with no guidance from an HR. Such individuals also get only limited guidance from the marketplace which is of little or no use. So, given the problems associated with getting around to obtaining an insurance, people often find themselves stuck in a rut, and end up choosing the seemingly safest option without actually being aware of its characteristics. The problem with this short-cut is that it often ends up costing a significant amount of money which otherwise would have been saved up in the account.
So, what should you do? The most logical start would be to familiarize yourself with the kind of insurances you will be offered. Typically, you will be made to choose between 5 – 7 health insurances. So, without further ado, allow us to shed light on the types of health insurance plans.
1. Preferred Provider Organization (PPO) Health Insurance Plans
A Preferred Provider Organization insurance is categorized as the group health insurance. Although, PPO plans are a bit pricey, they offer greater efficiency coupled with a high control over your healthcare needs. PPOs have a network of clinics onboard and it highly recommended for the patient to choose amongst them because these health care professionals offer their services for a lower price than the price quoted in the market. The patient has complete access of all the doctors on the network, so based on the benefits that fit his needs, he can opt for a clinician.
However, if the patient chooses to avail the services of a doctor outside the network, he will be charged an extra out-of-pocket cost.
This insurance is typically offered by businesses to their employees. Employees are typically charged an annual fee before they are able to acquire this benefit.
2. Health Maintenance Organization (HMO) Health Insurance Plans
Unlike the PPO plan the HMO plan is usually cheaper, however, the HMO plan doesn’t give you as great of a control over your health care needs as the former does. The HMOs often get confusing for patients as they are tedious and have plenty of set standards. For example, if you were to notice an irregularity in your skin, instead of going directly to a dermatologist, you’d be required to see your primary care physician (PCP) first. You would require the PCP’s referral to consult the plan-approved dermatologist.
Even though the process may come off as tedious at best, HMOs offer a wide coverage of preventive services rather than just policies.
The hassle of filing claims with HMOs significantly gets reduced, however, in case of emergencies you can’t reach out to a practitioner outside of the network without a notice.
There are certain pitfalls of the HMO plan, albeit the advantages of lower premiums and great preventive services makes it worth your while.
3. Point of Service (POS) Health Insurance Plans
Point of Service plans are an amalgamation of HMOs and PPOs which enable patients to consult with clinicians which are outside of the network. However, the referrals from PCP still stands to be an obligation. For out-of-network services, patients would be required to pay an additional fee depending upon the services availed.
This kind of plan is especially apt for people who don’t mind paying a bit extra for a variety of options and wider range of facilities.
4. Exclusive Provider Organization (EPO) Health Insurance Plans
Exclusive Provider Organization plan is similar to the POS plan, however, in this kind of plan the intervention of PCP isn’t necessary and referrals aren’t a prerequisite. However, for the small co-payments, patients are held accountable themselves and are liable to cover such payments. EPOs, although have a lower choice of clinicians to choose from, they offer a lower rate to their customers which makes them substantial for employees that don’t need to be offered a wide variety of choices.
The choice that a customer gets with an EPO plan is not that highly restricted as you do have the option to opt for an outside practitioner in case of emergencies, but ‘emergency’ is the keyword, here.
5. Health Savings Account (HSA) Health Insurance Plans
A replacement for the traditional group health insurance is the well-known Health Savings Account. Although this kind of insurance plan is individually owned, startups or small organizations can feel free to contribute, attaching the HSA plan to a group insurance. HSAs can be more specifically termed as an indemnity plan rather than an insurance plan.
The amount contributed to the HSA account is usually made pre-tax. The savings in the HSA account role over annually, additionally those savings can be used to clear any other dues or make any other payments. However, a fee will be charged.
6. Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs)
Yet another replacement for the group insurance plan is the Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs). This kind of plan is tailor made for smaller organizations which have no more than 50 staff members onboard. With this plan, employees of an establishment are offered a certain amount of tax-free money which they are supposed to purchase a health care insurance plan with. Once they do that, they are required to show proof, and at the end of the month, they will be reimbursed.
There are plenty of options for health insurances that a company or an individual can choose from. We’d recommend you to do your research prior to investing thousands of dollars into an insurance plan so that you don’t regret it later.