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What are the Different Types of Health Insurance?

Depending on the type of plan you have, your deductible and copay will vary.
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  • Written By: Damir Wallener
  • Edited By: Lindsay D.
  • Last Modified Date: 11 September 2014
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The US health care system comes with a great variety of health insurance options. The options span the spectrum from low cost, minimal coverage, to expensive, all-inclusive policies.

Catastrophic health insurance is amongst the least expensive forms of health insurance. Deductibles, the amount the individual pays out of pocket before insurance begins paying, are generally large for these types of policies. There may also be caps on the amount the policy will pay in case of illness. These policies are only suitable for individuals with the financial means to handle routine illnesses and hospitalizations.

Short-term health insurance is similar to term life insurance in that it can only be purchased for a specific period of time. Coverage provided by the policies ranges from catastrophic to comprehensive, with the latter considerably more expensive. Short-term health insurance often comes with strict qualifying procedures and may not cover pre-existing medical conditions. In particular, pregnancy and childbirth are not usually covered by these policies.

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A Preferred Provider Organization (PPO) is a health insurance plan where medical treatment is fully covered if provided by a doctor or hospital belonging to the PPO's network of health care providers. Treatment performed outside the network is also covered, but at a reduced rate. Policy holders are liable for any differences if seeking out of network treatment. PPOs are essentially a group discount form of health insurance; by maintaining administrative control over a group of doctors and hospitals, PPOs are able to provide medical care at a discount. PPOs generally require prior approval before allowing major medical services.

Health insurance from Health Maintenance Organizations (HMOs) greatly restricts who a patient may see for non-emergency medical services. The advantage is a significantly lower premium. HMOs have generated considerable controversy, as in many plans doctors receive financial incentives for reducing the amount of medical services provided to patients. One method of doing this has been to pay doctors a fixed monthly fee for each patient, regardless of the treatment they need. HMOs do tend to cover more preventive procedures such as immunizations, mammograms and physicals.

Full-service health insurance is also widely available, at considerable expense. These policies cover all illnesses, allow treatment virtually anywhere, and come with deductibles as high or as low as policy holders are willing to pay for. At the other end of the health insurance spectrum, Medicare/Medicaid is a form of public health insurance available to retirees and low-income individuals.

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Discuss this Article

comfyshoes
Post 4

Subway11- I hope they do get rid of this socialized medicine bill.

For one, I don’t know how insurance companies will be able to stay in business because if they have to cover everyone including those with preexisting catastrophic illnesses they will all go bankrupt.

It is just like going out and buying car insurance after you have had the accident and expect full coverage.

This is probably by design so that the government can eliminate private insurance companies and leave the government as the sole source of insurance coverage. I am holding out hope that it will get repealed because a Federal Court Judge in Florida already struck down the entire bill stating that it was unconstitutional.

We do need cheap health insurance but there are better methods to lower insurance costs. The best way to do that is to allow insurance to be sold across state lines.

If we allow insurance companies to sell their polices in all states equally, the sheer competition will drive costs down and will make individual health insurance more affordable.

subway11
Post 3

Crispety - You know all of these health insurance policies are all going to go toward a HMO type of tract with the government deciding which treatments are covered and which are not.

Our choices will be eroding soon as the doctors leave the profession in droves. As a result of this socialized medicine bill, Obama’s signature piece of legislation, about 40% of doctors said that they will retire early if this law does not get repealed.

I really don’t blame them because they will get their medical reimbursements cut by 20%. As hard as it is to become a doctor, I don’t know too many that can afford to continue to practice with such a hefty pay cut.

Not only do they have to deal with liability and medical malpractice insurance, but now they have to deal with pay cuts too.

This is also going to make health care more expensive in the long run and we may start seeing nurse practitioners step in where doctors use to.

Crispety
Post 2

BrickBack - I agree with you. I had a PPO myself and I preferred it to the HMO.

With a PPO health insurance plan, I could see any doctor that I wanted. However, if I was having an operation and the doctor was outside of the PPO network then I would only be covered for 70% of the bill. This is what happened to me when I had my daughter.

I kept my doctor but it cost me a little more for him to deliver my baby.

There is more affordable health insurance out there but you can’t place a price on peace of mind. I could relax knowing that I was in good hands because I had my doctor with me rather than some stranger that I picked from a list.

Also, I felt that my doctor knew my history better than any other doctor out there so I did not want to take a chance.

BrickBack
Post 1

I used to have an HMO health insurance plan with Aetna but I did not like it.

I really did not like the limited selection of doctors available within their network and having to see my primary care physician in order to receive a referral to see a specialist.

I know that the insurance premiums are lower and so are the copayments but I rather pay a little more to see the doctor that I want.

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