Health insurance is a necessary product that provides you with coverage when faced with medical expenses. No matter your age or current health status, you need to have a health insurance plan in case you get sick or injured.
However, it can be difficult to find the best health insurance when you don’t understand it. There are so many complicated terms and coverage options, but you can learn more and make an informed decision with this health insurance guide.
Types of Health Insurance
Health insurance is broken into two main categories: public and private. Public insurance includes Medicaid, Medicare, and CHIP. The majority of people have private health insurance. An employee typically provides it, or you can purchase it through a marketplace.
Private health insurance can then be broken up even further:
- On-Exchange: Private policies sold through government exchanges must cover the ten essential benefits and any other features required by your state. The insurer must offer plans at every metal tier. If you purchase one of these policies, you are eligible for tax credits and cost-sharing reductions.
- Off-Exchange: You can you buy a plan directly from a health insurance provider, privately-run market, or third-party broker. No matter where you get it, the plans are still required to offer the ten essential benefits. Unfortunately, you cannot get any subsidies, but they can often provide more options at lower prices.
- Employer-Provided: When your employer purchases and manages your insurance, it is part of a group plan. Again, it must follow the rules and offer the ten essential benefits, but you can usually get these plans at lower prices because of the group discount. With employer-provided plans, you don’t have the burden of searching the market for your own insurance.
Types of Private Insurance Plans
Aside from where you get your private insurance, you also need to consider the type of policy that best fits your needs.
Health Maintenance Organization (HMO)
HMO insurance plans restrict you to a selected network of providers, and you don’t get any coverage outside of your network. All of your care and referrals must be coordinated by an in-network primary care physician. Some people find them to be too restrictive, but they offer lower premiums based on deals they have with their network of healthcare professionals.
Preferred Provider Organization (PPO)
If you need more flexibility with your insurance, a PPO lets you choose between in-network or out-of-network providers. Costs will be lower for in-network care, though. You also have the option of seeing specialists without a referral. The flexibility comes at a price, so you can expect higher premiums with this plan.
Exclusive Provider Organization (EPO)
For a mix of the PPO and HMO, get an EPO. These plans still allow you to see a specialist without a referral, but you can’t seek care from out-of-network providers. Because of this, EPO premiums tend to fall in between HMOs and PPOs.
Point of Service (POS)
A POS plan is also a mix between PPO and HMO. You have a primary care provider coordinating your care, but you also have access to out-of-network options! With this plan, in-network care is more affordable, but you need a referral for in-network specialists.
Metal Tiers from Which You Can Choose
As we mentioned with the on-exchange insurance, you have plans at every metal tier, but what is a metal tier? They are simply categories based on how much you pay versus how much your insurer pays:
- Platinum: 10% consumer & 90% insurance company
- Gold: 20% consumer & 80% insurance company
- Silver: 30% consumer & 70% insurance company
- Bronze: 40% consumer & 60% insurance company
It’s important to note that these numbers don’t show the exact amount of your portion. It is just designed to give you an overall idea of how much you can expect to pay on your medical costs.
Factors that Determine Your Health Insurance Costs
Lastly, you need to know about the other factors that determine your costs so that you can understand your quote. Your out-of-pocket expenses largely depend on your:
- Premium
- Deductible
- Copayment
- Coinsurance
- Maximum Out-of-Pocket Expenses
Get Your Health Insurance Quote
Now that you know more about the basics, you can start to find the best health insurance for your needs. If you don’t have an employer-provided plan, we recommend that you start by getting a health insurance quote from several different providers. You can then compare the quotes to find the best policy for your healthcare needs and budget.