Getting the right health insurance coverage can go a long way in reducing your out-of-pocket medical costs. At the same time, with a number of different health insurance plans out there, it can be overwhelming to decide the right one for your needs.
While there are several ways in which health insurance plans can be categorized, here’s a breakdown of the main types of health insurance:
Public Health Insurance
Public health insurance plans are provided by government programs such as Medicare or Medicaid and are funded and operated by the government. Medicare is a federal health insurance program having four different parts for people over the age of 65. Medicaid, on the other hand, is a federal health insurance program for low-income and at-risk Americans. Similar to Medicaid is the Children’s Health Insurance Program (CHIP), that provides health insurance plans for those under the age of 18.
Private Health Insurance
Private health insurance includes individual health plans purchased on healthcare.gov, online, through an insurance broker or at the health insurance marketplace as well as employer-sponsored health insurance plans. They are mandated to provide ten essential health benefits in accordance with the Affordable Care Act.
Four Categories Of Health Insurance
Apart from the distinction of whether a health insurance plan is provided by a public or private health insurance agency, they are further classified as HMO, PPO, EPO, and POS plans:
- HMO: Health maintenance organizations require that you see a primary care provider as the starting point of your coverage.
- PPO: Preferred provider organizations tend to cost more, however, they usually cover out-of-network care.
- EPO: Exclusive provider plans only provide coverage for doctors within your network without requiring referrals to visit them.
- POS: Point-of-service plans involve a primary care physician and may require preauthorizations before certain medical procedures can be carried out.
Supplemental Health Insurance
Supplemental health insurance or Medigap provides coverage for medical costs that your current health insurance plan does not. These include dental and vision coverage, with some supplement health plans designed for covering specific medical conditions.
Non-Aca Compliant Health Insurance
Alternatively, there are health insurance plans that do not comply with the Affordable Care Act and are not regulated by it. These usually include short-term plans that can be purchased by those who don’t qualify for the enrollment period for purchasing or exchanging a health insurance plan.