Types of Individual Health Insurance
Some employers offer health insurance benefits to their employees but more and more people have been purchasing individual health insurance instead.
For some people, there are more advantages to having individual health insurance. Some of these factors include affordability, customization, portability and independence. Individual health insurance is multi-faceted; there are many different types of insurance to choose from, customizable to your own specific needs and the needs of your family.
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Types of Individual Health Insurance
If you’re new to this process, you may be wondering about the different types of individual health insurance. It can be daunting to weed through all the different types to find a plan that is best for you and your family.
Many first-time buyers don’t realize just how many different individual health insurance policies there are. Once you are familiar with the different policies, you will find that having so much choice is really a plus — each person is different and has different health care needs, and individual health insurance will ensure that you get the right plan for you.
There are two main kinds of individual health insurance plans - Managed Care, and Traditional Indemnity Coverage.
Managed Care Plans
Managed care health insurance is a type of insurance that covers medical services from a specific network of doctors, hospitals and providers. Common plans typically include HMOs, PPOs, and POS health plans. Some policyholders are able to open Health Savings Accounts to save money for future medical bills.
Managed Care plans typically include a set of selected providers, which are derived from a very selective process, utilization review and quality improvement programs, and financial incentives for enrollees. Managed care plans have an emphasis on preventative care for those who are not yet sick. There are a great number of different individual health insurance policies for consumers to choose from.
- HMO stands for Health Maintenance Organization. This is a form of individual health insurance that combines a range of coverage for groups. Doctors and other medical personnel offer care through the HMO for a flat monthly rate, with no deductible. Only visits to professionals within the HMO network itself are covered under the policy. All prescriptions and other care must be cleared before it will be covered.
Patients are provided with a primary care giver, who is in charge of their basic health needs and oversees their medical care. This includes non-emergency hospital visits.
- IPA (Independent Practice Association) is another type of HMO. They contract with a group of physicians to provide service to HMO members. The doctors are paid on the basis of capitation. This means that a set dollar amount for each patient enrolled in the HMO is assigned to that doctor or group of doctors, regardless of whether or not the patient is currently requiring care. Doctors can sign contracts with multiple HMOs and are not required to be exclusive to only one. Doctors who take part in IPAs typically also serve fee for service patients.
- Another type of commonly used individual health insurance plan is an FFS Plan, or Fee for Service Plan. Fee for Service plans typically allow you to go outside of the HMO network and deal with hospitals and doctors individually. You can pay a fee for the service provided in the event that you wish to, rather than go through the physician, hospital or provider that the HMO suggests. You still must pay a premium, and you are covered up to your deductible for basic protection and major medical.
- PPOs, or Preferred Provider Organizations, are composed of physicians, hospitals and other health care providers that offer services at reduced fees. They are similar to HMOs, with the exception that pay is received at the time of care instead of in advance. This allows for some added flexibility on the patient’s part, but does come at a greater expense in most cases. There is usually a deductible. PPOs generally do not have a copayment or have a low copayment; instead they offer a deductible and coinsurance feature. Deductibles must be paid before any benefits are provided. Once the deductible has been paid, the benefits will be applied.
- POS plans refer to Point of Service Plans is another form of individual health insurance. They are sometimes referred to as hybrid health care, as it mixes aspects of HMOs and PPOs for greater patient care.
Traditional Indemnity Plans
Traditional Indemnity Coverage covers medical care based on service rather than the health provider. These existed before Managed Care plans did, and at one time was the most common form of medical coverage. While more expensive, some people do prefer this type of insurance because of the freedom it provides. You can use it almost anywhere. Routine care remains the patient’s responsibility in most cases. Providers accept payment from the insurance company. You have the freedom to choose which health care providers that you wish.
Comparing Individual Health Insurance Plans
The main difference between these two types now is that traditional plans provide the same amount of coverage at all times but are a lot more expensive. This is regardless of what doctor you visit or what hospital you go to. Managed care covers care from particular doctors and health care providers.
With employer insurance, you usually only have one or two different types of insurance plans to choose from. With individual health insurance policies, the choices are endless. You are able to choose from hundreds of different options, each with different rates and benefits.
Here you can compare multiple plan options from many different insurance companies. Talk to licensed, experienced agents in your area and get advice on which plan combination is right for you.
Compare individual health insurance rates from many different health insurance companies. Each insurance company offers its own set of solutions, providing you with unlimited options.
When you find yourself ready to compare individual health insurance quotes to find a plan that is best for you, use our free service to obtain quotes instantly and easily. Speak with our local agents for advice and guidance. Our quotes are always safe, secure and risk-free.