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There are many different types of health insurance offering users a large range of options to choose from. This can make finding the ideal health insurance policy not only tedious but very confusing. Depending on where you live, government regulations can make finding the right health insurance plan increasingly challenging.
Before analyzing plans, it is important to understand a little more about health insurance and the types of policies you may encounter. While reading through the following information, be sure to keep note of what factors are most important to you. What is not as important? It is also important to remember that health insurance plans and laws vary by country. Some of the information we will provide is country-specific and may not apply to you.
Let’s dive in!
Health insurance can traditionally be broken down into two broad categories: Traditional and Managed care . Within those categories, there are four basic types of plans:
Traditional indemnity plans , which are now often called fee-for-service plans;
PPO, or Preferred Provider Organizations;
POS, or Point-Of-Service plans;
HMOs, or Health Maintenance Organizations.
There is no one size fits all healthcare plan, and they each have their benefits and drawbacks. It all depends on your particular needs and preferences. Some people may enjoy the autonomy offered by fee-for-service plans, while others prefer the low costs associated with closed-panel Health Maintenance Organizations. Also, as health insurers compete for business, among new government regulation, distinctions between the types of plans have become increasingly blurred.
Up until the 1990s, most people had traditional indemnity coverage. Today, this is known as, “fee-for-service” health care. Indemnity plans are a bit like auto insurance : you pay a certain amount of your medical expenses up front in the form of a deductible, and the insurance company pays the majority of the rest of your bill.
Modern medicine has both increased the cost of healthcare and life expectancy. As a result, insurance companies have tried to optimize their plans and business in order to reduce costs and give better care for their patients in an ever changing landscape of healthcare.
As mentioned above, indemnity or fee-for-service coverage was the gold standard for health insurance for most of the 20th century. Under this type of health coverage, you have complete control when it comes to choosing doctors, hospitals and other health care providers. You can refer yourself to any specialist without permission from your insurance provider, and the insurance company doesn’t get to decide which visit is “necessary.” However, you don’t have complete autonomy. Most fee-for-service medicine is regulated to an extent. For example, if you’re not at serious risk of death or incapacitated, you may need to get clearance for a visit to the emergency room.
Additionally, fee-for-service plans usually involve plenty of out-of-pocket expenses. There is a deductible, structured around your historical medical spending, you must reach before the insurance company starts paying. Once you’ve hit the deductible, the insurer will pay for about 80 percent of any medical expenses. This will either come in the form of up front payment or reimbursement.
Under fee-for-service plans, insurers will usually only pay for reasonable and customary medical expenses. Insurers will look at what other practitioners in the area charge for similar services to find what they deem as acceptable. If your doctor happens to charge more than what the insurance company considers “reasonable and customary,” you’ll most likely have to make up the difference on your own or change doctors. In addition, preventive care services like annual check-ups aren’t covered under fee-for-service plans. However, as these are becoming increasingly essential for longevity, some insurers are now covering them.
As a safety net of sorts, fee-for-service plans often include a ceiling for out-of-pocket expenses, after which the insurance company will pay 100 percent of any costs. This is usually pretty high, but can save you in a very tough situation.
All health insurance plans in the United States compliant with the Affordable Care Act (the law commonly referred to as Obamacare) are major medical health insurance plans. Different types of major medical health insurance include:
Obamacare health insurance plans for individuals and families
Employer-based health insurance plan
Qualified Health Plans (these are Obamacare plans that can be purchased with a subsidy)
Catastrophic Plans (primarily available to people under age 30)
Government-sponsored health insurance coverage ( Medicare, Medicaid, etc.)
Other types of health insurance products that do not qualify as major medical health insurance include:
Short-Term Health Insurance
Gap Insurance (Accident, Critical Illness, Telemedicine, etc.)
Most Americans get private health insurance from their employer or union. Others get it from the government through Medicaid or Medicare . The rest typically buy their own health plan through a government-run health insurance marketplace, a private online health insurance marketplace or through a local broker or agent. Obamacare requires everyone to have a major medical health insurance policy or pay a tax penalty for being uninsured.
Let’s take a deeper look at your options.
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Under the ACA, medical plans must offer minimum essential coverage, meaning that no one can be turned down for a plan during the Open Enrollment Period for medical reasons, including pre-existing conditions. In addition, certain services and treatments must be offered in all health plans, regardless of where you buy the plan or from what insurance company.
Obamacare-compliant major medical health insurance plans come in several different formats, as described below:
HMOs are one of the most popular types of health insurance you can purchase. With this plan, an entire network of health care providers agrees to offer you its services. You have to select a primary care provider (PCP) who coordinates all of your health services and care.
HMOs usually offer coverage for most types of preventive care, including specialist visits, but specialist visits are only covered when your primary care provider makes a referral. Additionally, you will have copayment fees for every non-preventive medical visit, and you may have an annual deductible. HMOs are usually best suited for individuals and families that plan to see their primary care doctor on a regular basis for check-ups and other health concerns.
Under a PPO plan, both you and your family can see any health care provider in the insurance company’s network, including specialists, without a referral. In most cases, you are not required to choose a primary care physician or to get referrals to see specialists. You will typically have copayments for any non-preventive medical care you receive, and you may have an annual deductible. Individuals who visit a specialist regularly generally prefer this type of health insurance.
With an EPO plan, you have access to all of the health care providers within the EPO network, including specialists. Whereas PPO plans may offer you some coverage outside of your network, EPO plans typically will not (except for emergencies). EPO plans can be suited well to individuals who don’t mind limiting themselves to providers within a network and who don’t want to coordinate their care through a primary care doctor.
POS plans are a hybrid of HMOs and PPOs. With a POS plan you will typically have to designate a primary care physician for regular check-ups and referrals. However, you can also use out-of-network providers if you’re willing to pay out of pocket. Additionally, you’ll usually have a copayment and deductible. This type of plan is versatile, and can be good for people who are willing to pay a little more for some extra flexibility.
High-deductible plans cross categories. Some are PPO plans while others may be EPO or HMO plans. This type of health insurance has a high deductible that you have to meet before your health insurance coverage takes effect. These plans can be right for people who want to save money with low monthly premiums and don’t plan to use their medical coverage extensively. HDHPs are often coupled with a Health Savings Account (HSA). If you already contribute money to an HSA, you can buy an HSA-compatible health plan. Money contributed to an HSA can be saved on a pre-tax or tax-deductible basis to pay for qualifying medical expenses, including annual deductibles.
Short-term health insurance plans do not comply with the Obamacare law. However, if you missed the Obamacare open enrollment period, a short-term health policy can provide you with some coverage in the meantime.Short-term insurance offers more limited benefits than major plans, but can help safeguard your finances in the case of a covered illness or accident. In addition, short-term plans can exclude coverage for pre-existing conditions. Short-term insurance is non-renewable, and doesn’t include coverage for preventative care such as physicals, vaccines, dental , or vision.
Gap insurance plans are designed to provide an emergency safety net for unexpected medical costs, or other costs you may face in case of a medical emergency. If you don’t have a major medical policy, you might want to get gap insurance to get coverage in case of serious health issues. But, you can also get gap insurance even if you have a major medical policy or short-term policy, as a supplement to provide additional protection.
Critical-illness insurance, which pays you a lump sum if you are diagnosed with cancer, heart attack, stroke, and certain other serious illnesses.
Accident insurance, which gives you a cash payout in case of covered accidents.
Fixed-benefit indemnity medical insurance, which provides cash payouts if you suffer from specific illnesses or injuries covered by your policy.
Be aware that catastrophic plans don’t meet the minimum essential coverage required by the ACA. So, if you have a catastrophic plan, you may still be subject to the tax penalty if you don’t simultaneously have a major medical insurance plan.
The insurance plans described so far—major medical, short-term, and catastrophic—don’t typically cover routine dental or vision care. So, you may need to add separate plans for that kind of care. To get coverage for dental exams, x-rays, cleanings, and fillings, you’ll need to choose a dental plan. Dental plans may also cover more specialized services such as orthodontia, periodontal treatments, veneers, bonding, dentures, and others.
For coverage for vision exams, eyeglass frames and corrective lenses, contact lenses, and other eye-related care, you’ll need to consider adding a vision plan. Keep in mind that a vision plan can be more critical as you or your family member’s age, even if you’ve never needed vision correction previously.
As you can see, there are plenty of different healthcare options to choose from. There is no one plan that is better than the others on the surface, it just depends on your specific needs. Try to find a plan that is going to comply with government regulations, but also provide you with adequate care at an affordable price for you. Luckily with the ACA more and more people now have access to inexpensive health care, but under the Trump Administration, these rules seem to be changing and universal healthcare will no longer be the norm. As a result it's critical to stay aware of the shifting guidelines and coverage options from health care providers. Keep following Insuranks to stay up to date on all things insurance and health care.
For more information, check out USA.gov.
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Policy Type: Health Insurance
Company name: Aetna Insurance
Aetna are terrible. I was prescribed an FDA approved drug that is generic and cheap. Aetna refused to cover, so I paid $25 for three months worth; it works for BPH. I filed an appeal with Aetna and the doctor and urologist got involved also-and I won the appeal. This did not matter to Aetna, the next prescription was refused. I paid myself. What would they cover if it were for Alzheimer’s or Cancer. Pointless paying for insurance only to find at point of use that they can decide not to pay anything regardless of FDA and doctors.
tammy lyons Insuranker
Policy Type: Health Insurance
Company name: EasyMedicare.com
All of a sudden since signing up for easymedicare my insulin isn't being covered im not exactly 100% sure why but I'm leary
Excellent health insurance alternative for those on a budget! Being able to visit any doctor you want is a major plus and the rates are lower than ACA health plans.
I really couldn't imagine such great experience and rock bottom rates - top class coverage and service!
Policy Type: Health Insurance
Company name: Aflac Insurance
Following my dad's death, AFLAC charged us for 2 months premiums as they required proof of death. As you may know, it takes time to get a death certificate, as it depends on the county health department responsiveness. After faxing it, I got in touch to verify that they reimburse the automatically charged premiums from my dead father's bank account. Even requested a supervisor and talked to one named James, but they did not reimburse it. So be ready to pay Aflac's health insurance even when you're dead! This company does not let you talk to anyone other than those you received your customer service from. I recommend to avoid.