What Type of Individual Health Insurance is Right For You?
There are three main types of individual health insurance: PPO, HMO, and Fee for Service. Each of the three individual health insurance policies differ in important ways from the next, and it is important to know which one is best for you and your needs before choosing a policy.
With Fee for Service, or Indemnity plans, the insurance company pays the fee for the services that are provided to you. You can choose your own provider and have great flexibility in the type of care that you receive, but you are required to pay upfront for your care. The insurance company will then reimburse you for the care after review. If you wish to have a lot of flexibility and choice, this may be the plan for you but is usually the most expensive.
With Fee for Service you must also pay monthly premium, deductibles, and coinsurance. You may also have an annual cap which limits the amount of medical expenses you can accrue each year.
Health Maintenance Organizations (HMOs) work much differently. These tend to be the most affordable; however, you give up a good deal of choice in regards to your health care providers. HMOs use networks of providers, and in most cases you will be assigned a primary care giver who oversees your medical care. You will be responsible for some copayments but you don’t need to pay for all services upfront and there is no need to file forms or be reimbursed. HMOs are by far the most cost-friendly option.
Preferred Provider Organizations (PPOs) are a merge between the two aforementioned types of individual health insurance policies. They have in-network providers that are assigned to provide your medical care. Using these pre-approved providers will benefit you as they are a great deal more affordable. Consumers with these types of plans can go outside of their network to get the health care services they need. Your insurance will cover a percentage of this medical care outside the network, but in most cases you will have to pay more than if you saw provider in your network.
Once you’ve decided the type of insurance you wish to purchase, you can look at the premiums and deductibles for your plan. In many cases you can adapt and customize these plans to suit your specific needs. Some people choose to have higher deductibles so that they may pay lower monthly premiums.
People who have a lot of health care needs and require a good deal of care may choose to pay higher premiums so that they have a lower deductible for their care. Many people are also now choosing to utilize a Health Savings Account. These help with added medical costs and unexpected treatments. These are available to those who are enrolled in plans with high deductibles. The funds that are deposited into the account are not subject to federal income tax. The funds also roll over and can be spent for years to come. Many like to utilize these on top of their insurance to insure that they can afford costly medical care, should the needs arise.
There are many options when looking for individual health insurance coverage. People can find affordable coverage with the health insurance benefits they are looking for.
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