Types of Health Insurance Coverage

If you have taken a general look on health insurance you probably know that no health insurance plan will provide coverage against all types of medical services. And there are different types of plans that will address specific insurance needs. Choosing the right plan type is crucial for getting adequate health insurance coverage. So before you make the decision take the time to learn more about different types of health insurance coverage.

In general there are two main types of health insurance coverage:

Fee-for-service or indemnity

This is the traditional type of health insurance that allows you getting services from just any provider you want. After receiving your care or services, the doctor will contact your insurance company with a claim, and it will pay for 80% of the bill while you pay only 20%. Looks simple enough, but in fact it is the most expensive form of health insurance and is rarely purchased these days.

Managed care

Managed care health insurance plans are newer than indemnity plans and offer lower costs for the coverage they provide. The catch is that there are a lot of limitations and rules with these plans that allow the actual cost reduction. Currently, there are different types of managed car plans on the market and the difference between them can be quite pronounced when receiving your care:

Health Maintenance Organization (HMO)

HMO plans are some of the most popular and cost effective health insurance plans today. With such a plan you receive a set of basic medical services for a small fee or even free of cost. But the plan will require you to choose a primary care physician who will refer you to all other specialists you need. There is a set network of specialists and facilities that you can get covered in, and if you choose to receive your services outside the network you won't be covered at all.

Preferred Provider Organization (PPO)

PPO plans provide a greater degree of freedom compared to HMOs, but in general both types are quite similar. With a PPO you will also have to choose a primary care physician in order to get referrals to other specialists. But you will be able to get coverage outside of the network only for a higher fee than with in-network specialists.

Point of Service (POS)

POS plans are somewhat of a mix between HMO and PPO managed care. Like with the first two types, you will have to choose a primary care physician for the in-network referrals and services. However, you can also address out of network specialists without any referrals and the costs will be higher in that case (but you will still be covered).

Health Savings Accounts

Health Savings Accounts (HSAs) have become an alternative to traditional and managed care plans in the last few years. HSA is not a straight-up health insurance plan as it involves a special savings account that is tax-deductible that is used for financing health services and can be accessed anytime. And there are a lot of people going with this option lately.

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Here you can read more articles on health insurance.