The three primary types of health insurance plans

Most health insurance companies offer a variety of health insurance plans, letting you select the best health insurance coverage for your specfic needs. There are three main types of health insurance plans:

• Health Maintenance Organizations, HMOs, offer the most affordable health insurance option. However, they are also the most restrictive about working through primary health care providers who manage your care for the health insurance companies.
• Preferred Provider Organizations, PPOs, also encourage, but do not require, members to work through primary health care providers. If you see health care providers who are not on the health insurance plans’ list, you will often pay higher health insurance costs.
• Fee-for-service health insurance plans are the least affordable health insurance coverage. However, they are also the most flexible, allowing members the most freedom to choose health care providers.

Which type of health insurance plan is right for you can depend on many different factors. It is recommended to compare health insurance quotes from multiple sources in order to get a good idea of what is available to you before making a final decision.

Understanding managed care health insurance plans

Managed care is a more affordable health insurance option that offers individual health insurance, family health insurance, and group health insurance. Managed care health insurance companies contract with health care providers (hospitals and doctors) to care for members of their health insurance plans.

Read your health insurance policy information carefully and check the health insurance plans’ site to find health insurance coverage rules, and learn about all costs involved.

Keep in mind that managed care health insurance plans generally provide affordable health insurance options if you use health care providers who are part of the plan. If you use health care providers outside of the plan, or network, costs can go up dramatically.

Understanding Preferred Provider Organizations (PPOs)

Preferred Provider Organizations (PPOs) generally give members the most flexibility about their choice of health care providers.

A PPO gives members access to a network of health care providers who charge reduced rates. Members often have a choice of using the PPO or non-PPO provider, but there is a financial incentive to use the PPO health care provider.

In other words, PPOs offer reduced health insurance costs for the health care providers within their network. To see out-of-network health care providers, members pay the difference between the health insurance companies’ allowable cost and the health care providers’ fee.

Understanding Health Maintenance Organizations (HMOs)

Health Maintenance Organizations (HMOs) are a form of managed care health insurance coverage. HMOs offer individual health insurance, family health insurance, group health insurance, student health insurance and temporary health insurance plans. Federal health insurance, like Medicare, also provides an HMO option.

HMOs require members to select a primary physician who will manage your overall care. To see other health care providers within the HMO, members must obtain referrals from their primary physician. You may end up paying higher rates to see health care providers who are not part of the HMO.

Generally speaking, HMOs provide an affordable health insurance option. HMO health insurance premiums and patient co-pays are generally on the low side, which can translate to lower health insurance costs.

How to compare health insurance plans

Before buying health insurance coverage, it is recommended to compare providers and plans that may be available to you.

To conduct a thorough comparison, list all health insurance companies in your area. For each company, note the different types of health insurance plans, coverage, benefits and rates.

Consider health insurance costs last. The most affordable health insurance plans may not offer the best health insurance plans for you. Check the health insurance companies’ Web sites for an online health insurance database of health care providers. See if your current health care providers participate in specific health insurance plans.

Find out if the health insurance coverage includes an annual exam and preventive health care. Also, record the level of care provided for serious medical illnesses conditions.

In summary:

• List all health insurance companies in your area.
• Note the different types of health insurance plans and coverage.
• Note the different types of benefits and rates.
• Check databases of health care providers associated with each plan.
• Find out about coverage for preventive health care for each plan.
• Be aware of the level of care provided for serious medical conditions with each plan.

Understanding COBRA health insurance coverage

If you leave your job, you may no longer be eligible for your past employer’s individual health insurance or family health insurance plans. COBRA health insurance, or Consolidated Omnibus and Budget Reconciliation Act of 1985, is a temporary health insurance, allowing you to continue with the same health insurance policy for a specified amount of time.

The COBRA health insurance law applies to anyone who works for a business with more than 20 employees. If the group health insurance was through your spouse’s job, but you are now widowed or divorced, you can sign up for COBRA health insurance. For 18 months after graduation students, no longer covered by student health insurance, may also purchase COBRA health insurance.

Keep in mind that in order to keep your health insurance policy, you will have to pay the health insurance costs, also called health insurance premiums. You will no longer be eligible for the same health insurance rates as provided by your employer’s group health insurance.

Visit COBRA FAQs for more information.

Finding affordable family health insurance plans

Start by investigating group health insurance plans, which can offer more affordable health insurance coverage for families. See if your employer offers group health insurance – ask about both individual health insurance and family health insurance plans.

If you recently left your job, ask about COBRA health insurance, which is a temporary health insurance option. Or, if you are on a limited income, check to see if you qualify for federal health insurance.

Is a member of your family a full-time college student? They may qualify for student health insurance. If none of these group health insurance options work for you, pursue purchasing a private health insurance policy.

Ask a health insurance agent or health insurance broker to help you find health insurance companies in your area and to provide information on the types of health insurance plans and free health insurance quotes. You can also compare free quotes online.

To find the best health insurance for you, compare multiple providers and plans.

Definition of a health care provider

The term “health care provider” is used to describe the hospitals, clinics, doctors, and other health care professionals who work for particular health insurance companies.

Health insurance companies contract with a network of health care providers to provide the best health insurance coverage for members of their health insurance plans.

Health insurance companies negotiate health insurance rates, allowing them to control health insurance costs and offer more affordable health insurance premiums to the members of their health insurance plans. Most health insurance companies offer an online health insurance database of their participating health care providers.

About fee-for-service health insurance plans

With fee-for-service health insurance coverage, also called point-of-service coverage, members select primary health care providers. The primary heath insurance providers then manage members’ health care for the health insurance companies.

Fee-for-service health insurance plans control health insurance costs by negotiating discounted health insurance rates with participating health care providers.

Members of these health insurance plans only pay co-pays and deductibles if they see health care providers who are not participants of the health insurance companies’ network.

Understanding Federal health insurance plan

Federal health insurance is a group health insurance plan provided by the U.S. government. Types of federal health insurance include (1) coverage for U.S. military families and retirees, (2) coverage for American Indians at Indian Health Service facilities, and (3) Medicare.

Medicare is available for people age 65 or older, people under age 65 with certain disabilities, and people of all ages with End-Stage Renal Disease. To learn if you qualify for this federal health insurance policy, visit medicare.gov or call 1-800-MEDICARE.

For help identifying the federal health insurance plans available to you, contact your State Health Insurance Assistance Program. Talking with a local health insurance agent or health insurance broker may also help.