Did you know that the number of people without health insurance has fallen to 8% of the U.S. population? That means around 26 million people are living their lives without any form of medical or health insurance.
That’s terrifying considering that a broken bone that requires surgery might cost you up to $10,000 without insurance. That’s why it’s critical to have the right medical insurance on hand, but are you familiar with the different types of medical insurance?
If the answer is a resounding no, then no worries. You’ve come to the right place. Keep on reading to learn all about the types of medical insurance, both public and private. Then, we’ll give you some tips on how to pick the right one for you.
Types of Medical Insurance 101
Before we start delving into the delightful world of the different health insurance providers, and how their plans differ from one another, let’s clear up the overarching categories.
Those are the two core types of health insurance, which are public and private.
When it comes to public health insurance, you’ll be seeing healthcare plans that the state subsidies in return for a premium. In the U.S., those plans are the ones you hear about all the time in the news, or you might be eligible for one yourself.
It’s Medicaid, Medicare, and if you’re a veteran, you would’ve heard of the Veterans Health Administration. All of those exist under the umbrella of public medical health insurance.
On the other end of the spectrum, we have private health insurance. Those make up the main majority of health insurance plans in the nation. And, they can be roughly divided into four different kinds of entities.
There are the Exclusive Provider Organization (EPO), the Preferred Provider Organization (PPO), the Point of Service (POS), and the Health Maintenance Organization (HMO). You can find other types available to you on the market. But, those are the main health insurance providing players right now.
For instance, if you’re a medical professional, you might be opting for specialized medical professional insurance.
Now, let’s take a look at the main four types of medical insurance.
Exclusive Provider Organization (EPO)
Whenever you hear from friends or family about having to pick a health provider within their network, they’re most probably talking about a health insurance plan provided by an EPO.
This is a health care entity that will only take part in cost-sharing your coverage if you visit providers within their pre-stated network. If you happen to visit a hospital or a healthcare provider that’s “out of network,” it’s as if you don’t have medical insurance. You’ll have to pay the full cost of the service.
Yet, there’s only one exception to this rule, and that a case of emergency. For example, if an ambulance picks you up at an out-of-network hospital, the fees for the ambulance itself can be covered under the cost-sharing policy.
The main perk of having an EPO is that it’s rather affordable. Yet, it’s rather obvious that its glaring drawback is in the limitation of providers within your network.
Preferred Provider Organization (PPO)
Similar in nature to an EPO, a PPO will also offer cost-sharing benefits if you visit in-network hospitals and facilities. Yet, this one differs in its ability to still give you some cost-sharing benefits, when you go to out-of-network providers.
The key advantage of getting a PPO plan is that you don’t have to receive a referral to visit a healthcare specialist, like a mental health professional, or a chiropractor.
You can just set an appointment and go, no need for visiting your primary care provider first.
As for its costs, you can expect to pay more in comparison with an EPO. However, you can take advantage of the added flexibility and freedom of choice.
Point of Service (POS)
A POS health insurance plan will allow you to pay less when you visit in-network facilities and doctors. But, you’ll still have the freedom to visit out-of-network providers and get a slightly reduced rate.
Consider it a cheaper version of a PPO plan. In addition, you’ll still need to visit your PCP before reaching a specialist.
Health Maintenance Organization (HMO)
An HMO health insurance is all about giving coverage for medical facilities and doctors that have a contract with said HMO. So, you’ll be dealing with the same factor of the cancellation of cost-sharing for your visits to out-of-network providers.
What makes an HMO unique is the inclusion of integrated care. Think of wellness and prevention programs. The problem, however, is that it’s quite restrictive when it comes to picking your medical provider.
On the other hand, if you’re looking for a budget option, then an HMO will more than suffice.
How to Pick the Right Medical Insurance
At this point, you might already have a favored type of medical insurance, or you feel like a PPO might be the best fit for you. Regardless, you’ll want to keep a couple of factors in mind before finalizing your decision.
The first will be to compare your estimated yearly costs, not just your monthly premiums. It’s rather tempting to just look at one number and have that be your main comparison point.
Yet, medical insurance plans don’t work that way. You won’t be only paying the monthly premiums. There are other costs that you should keep a close eye on. There are multiple free online tools, especially government-based one that can help you calculate your total yearly costs. Once you have that figure, you can actually assess whether the plan you like is as cheap as it first appears to be.
The other element is all about how much healthcare you actually need or use every year. Of course, if you’re already dealing with a chronic illness or a pre-existing condition, then you’re familiar with the amount of care you need.
But, if you’re a healthy and young individual, you can pick a plan that would cover any emergencies, like a surprise diagnosis or an accident.
Unlocking the Different Types of Insurance: Medical Edition
We know how overwhelming it can be to switch your medical insurance from one provider to another, or even you’re approaching 26 years old and need to start giving your own medical health insurance options a good look.
Hopefully, our explainer has shed some light on the key types of medical insurance that you can choose from. Remember to always start with doing your research and give your potential provider a call or two, just to see what their customer service quality is like.
And, if you liked our article, make sure to check out additional tips and advice, all available to you in our health section.