Health Insurance for Every Need: Understanding the Kinds Available

Health Insurance for Every Need: Understanding the Kinds Available

Your health insurance policy is an agreement between you and your insurance company. The policy lists a package of medical benefits such as tests, drugs and treatment services.

In the United States, there are about five different types of health insurance policies available: conventional health insurance policy; preferred provider organizations or PPOs; point-of-service plans or POS; health management organizations or HMOs; and most lately, health savings accounts or HSAs. With so many types of health insurance policies, it may be confusing trying to figure out which one best fits your needs, so thoroughly explore each and speak with a professional person if you need clarification.

Conventional health insurance is the one that most people think of when they think of health insurance policy. You pay the insurance company a premium every month, and if you have an accident or need for health insurance coverage, you have a deductible sum of money you must pay and then the insurance company picks up the rest of the bill. You often have an affordable office and/or prescription co-pay with conventional health insurance policy.

With people living longer, health insurance companies started to look for more techniques to reduce their prices, developing different health policies such as PPOs. PPOs are plans which will cover nearly all of your medical expenses as long as you stay within a preferred network of doctors or hospitals. This network creates a “preferred provider” list that you can choose from. Treatment outside this network of providers is covered but only at a low price, implying you end up paying more to see a doctor outside the network. By limiting the doctors and hospitals covered in their network, the insurer can control, to an extent, their prices and bring down your premiums. POS plans work like PPOs, but expect you to have a primary care doctor through whom you can get referrals for medical specialist*. If you need to see a neurologist or a dermatologist, you must first visit your primary care doctor for an initial diagnosis in order to get a referral to a medical specialist for a more thorough diagnosis. POS plans also have a preferred provider network, and if you choose to visit a medical specialist or doctor outside that network, your coverage will be confined.

HMOs combine a stricter version of PPOs and POS policies. HMOs have a defined list of doctors, often much smaller than PPO networks, which you may see. You will not be covered in the least if you see a doctor outside your HMO network. Moreover, you must also get a referral from your primary care HMO doctor to see any medical specialist. Nevertheless, these limitations imply that you pay an extra low or no monthly premium.

HSAs were lately signed into law by President George W. Bush. You can deposit money into a specialized non-taxed, interest-gaining savings account that must be used for medical expenses. The perfect situation for an HSA is to combine the account with a low-priced, high-deductible insurance policy. The savings account is planned to allow you to cover the high deductible if you find the need to cover high-dollar medical costs while the insurance company will pick up the rest of the bill.

Once more, it is crucial to cautiously look at each alternative before selecting a single health insurance policy. Your health is important-make sure it is protected in the best way possible.