Caribou: Common Types of Health Insurance Plans and What They Mean

August 12, 2020

Caribou

Caribou

August 12, 2020

With any complex health condition, you will want to know the best possible treatment plan. But this also means that you will need to understand your health insurance to be sure your providers and treatments will be covered. Whether you are looking for health insurance plans or wanting to know more about what your plan covers, it is a good idea to start by understanding health insurance plans in general. 

Types of health insurance

Understanding health insurance is important so that you are aware of all the costs associated with your treatments. Your expenses, such as out-of-pocket expenses, will vary based on the type of health insurance you get.

What is an HMO?

Health Maintenance Organization (HMO) is a popular health insurance plan as it includes access to specific doctors and hospitals within its network for a monthly or annual fee. It has low premiums, low deductibles, and fixed co-payments. This means that care and treatment under an HMO plan are covered only if you see providers in the network.

This network is made of a group of providers that provide care at a lower rate which allow for co-payments, premiums, and deductibles to be lower. Contact your insurance provider to find out more as some out-of-network services, such as emergency care, might be covered, too. This plan is generally an affordable option for families and employers.

HMO type insurance may be suitable for those who want to pay the least amount in premiums and not face high deductibles. You might consider an HMO if you have already chosen your health care providers and know they’re in the HMO network, if you don’t see specialists often, if you don’t require referrals often, if you don’t mind the limitations of only seeing providers in your network, and if your budget is more important than flexibility.

To summarize:

Pros

  • Lower premiums

  • Lower costs than PPO

Cons

  • Restrictions to receive care in the network

  • Requires a referral to see a specialists

What is a PPO?

Preferred Provider Organization (PPO) is a plan in which there is a subscription to a network of health professionals and facilities at reduced rates. These healthcare providers within this plan are referred to as Preferred Providers. Those using this plan are able to use any services of the providers within the network and do not require a referral to visit a specialist. But utilizing costly services, such as an MRI, may still require you to obtain an authorization from a physician. This type of plan also includes an out-of-pocket maximum for in-network care, which varies depending on your insurance provider. There are out-of-network options, but at a higher cost.

PPO might be an option for you if you utilize health care services and specialists regularly, want the flexibility of going out-of-network without obtaining referrals, and are comfortable paying higher premiums but less for the health care services themselves. 

To summarize:

Pros

  • Larger network

  • Some coverage available out of network

  • No referrals required to see a specialist

  • Flexibility

  • Low out-of-pocket costs

Cons

  • Higher premiums

  • Deductibles 

  • Require claim forms for out-of-network providers

What is HDHP?

A High Deductible Health Plan (HDHP) is a plan with a higher deductible and lower monthly premium. HDHP is at times also referred to as Consumer Driven Health Plan (CDHP). 

This is the only plan that can qualify for a Health Savings Account (HSA), which can allow you to pay for certain medical expenses without federal taxes. There are higher out-of-pocket costs but this can be offset with HSA to cover some or all of the deductible. 

Like the PPO, the insurance provider will begin to pay its share of the co-insurance after you have reached your deductible. An HDHP can vary depending on the specific plan you have opted for, such as coverage for preventative care.

HDHP may be an option for you if you are healthy and don’t expect to use many health care services within the next year - but you will need to be sure that you can afford the out-of-pocket maximum in a worse case scenario - and if you would rather pay fewer upfront costs in premiums with the understanding that you will be paying more out-of-pocket when using health care services due to the higher deductible.

To summarize:

Pros

  • Lower premiums

  • Employer-contributed Health Savings Account

  • No referrals required

  • Some plans provide out-of-network coverage

Cons

  • High Deductibles

  • Require claim forms for out-of-network providers

What is an EPO?

An Exclusive Provider Organization (EPO) plan is similar to HMO but it has a larger network and only covers in-network care. Premiums are higher than HMOs but lower than PPOs and may or may not require a referral from a primary care physician when accessing different health care services. Similar to a PPO, authorization will be required before accessing an expensive medical service.

EPO may be an option for you if you like the flexibility of a PPO and are able to receive the care and treatment within the network.

To summarize:

Pros

  • May or may not require referrals

Cons

  • Coverage only within network

What is a POS?

A Point-of-Service Plan (POS) is a plan that provides you with out-of-network coverage. This plan may require a referral from a primary care physician before visiting a specialist. However, you can access an out-of-network physician for a higher fee. It will be important to consider this plan if you are managing a health condition and one or more of your health care providers are out-of-network.

POS may be an option for you if you need to receive care out-of-network but also want a primary care physician coordinating your care and treatments.

To summarize:

Pros

  • Flexibility

  • Out-of-network coverage

Cons

  • File claims for out-of-network care

  • Higher deductibles

Do you have the right health insurance policy?

After understanding the types of managed care plans, you may want to contact your insurance provider to learn more about cancer insurance policies. In certain policies, certain health conditions, such as cancer, are eligible for extra coverage on medical expenses that your regular insurance doesn’t cover. Other policies may also give you a fixed amount of money with your diagnosis. 

By contacting your insurance provider, you can learn more about the limitations and waiting periods and exactly what the plan will cover. To get started:

  1. Call the customer service number on the back of your health insurance card and ask for member services

  2. Ask your insurance key questions to make sure you have the right plan

All of these insurance plans depend on your financial and medical situations, as well as your personal preference.

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