Types of Health Insurance Plans
There are three common types or categories of health insurance plans: Most health insurance plans will fall into one of these three categories. The policy that you ultimately choose will likely come with its own coverage details, such as specific coverage, costs, and benefits.
Health Maintenance Organizations (HMOs)
An HMO or health maintenance organization is an association of health care professionals and medical facilities that sells a fixed package of health care services for a fixed price. Each patient has a primary care physician (PCP), often referred to as a “gatekeeper.” The plan doesn’t cover services provided by a specialist unless the PCP determines that the specialist is necessary and issues an in-network referral. All of your care is coordinated through your PCP.
Who Is This Plan Best For?
HMOs may be best for healthy individuals who don’t go to the doctor very often and who are looking for a budget-friendly health insurance plan.
Preferred Provider Organizations (PPOs)
A PPO or preferred provider organization includes the managed care aspect of an HMO but with the added flexibility of being able to go outside the network of health care professionals and facilities. You can go to any health care provider of your choice when you feel it’s necessary. But your benefits may be less if you go outside the network, and you may pay more out of pocket than you would if you had stayed within the network. You do still receive some coverage, however, unlike in an HMO.
Who Is This Plan Best For?
PPOs may be best for people who are looking for flexibility with the health care providers they choose to see, whether they’re in-network or out-of-network.
Indemnity, Fee-for-Service (FFS), and Point-of-Service (POS) Plans
Traditional plans that allow you to go to any doctor or specialist you choose without the need for a referral are called “indemnity,” “fee-for-service” (FFS), or “point of service” (POS) plans. The insurance company pays for a set portion of your charges with these plans, and you pay the rest. They provide the most flexibility because they don’t set restrictions on the providers you can use, and they generally don’t require that you select a primary care physician (PCP). Indemnity plans are less popular than they used to be and may be more expensive health insurance options.
Who Is This Plan Best For?
Indemnity, FFS, or POS plans may be best for those who are looking for a combination of both HMO and PPO plan structures.
Where Can I Get Health Insurance?
You may be able to sign up for a policy with an employer-sponsored group health insurance plan if you or a family member has one. Unfortunately, many small businesses don’t offer health insurance. You can sign up for an individual health insurance plan yourself directly through a health insurance company’s website or on the Health Insurance Marketplace if you work for a company that doesn’t offer health insurance, or if you’re unemployed and not eligible for coverage through anyone else’s plan. Other ways you may be able to get health insurance include Medicare, Medicaid, or the Children’s Health Insurance Program (CHIP), or through membership in a labor union, professional association, club, or other organization that offers health insurance to its members. You can compare major health insurance companies through the Marketplace, as well as coverage options and costs. You can generally sign up for health insurance on the Marketplace if you’ve experienced a qualifying life event, such as loss of coverage due to a layoff, or during open enrollment which is usually between Nov. 1 and Jan. 15.
