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What Are My Health Insurance Options? HMOs, PPOs, and More Explained.

A guide helping you understand your options so you can make an informed choice about your healthcare.

A customer being assisted by an insurance broker. They're finding out what their health insurance options are.
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If you’re in the market for affordable health insurance, you’re not alone.

The whole process should be straightforward and easy, like clicking a button. Sadly, with so many options available, we’re left overwhelmed.

But you may be asking yourself,…

How to pick the best health insurance plan?

Where do I start? Everything has too many options with terms I don’t understand.

The good news is that there are several options available to you. All of them have their own set of benefits and drawbacks. But, by understanding your options, you can make an informed decision about what type of health insurance is right for you.

Before we begin, if you prefer to watch or listen to our discussion like a podcast, please check out our video:

We’re your partner in coverage, so let’s get started with understanding…

What is the basic concept of health insurance?

It is designed to help you pay for healthcare services and treatments, such as doctor visits, hospital stays, and prescription drugs. Understanding this is important because it ensures that you are getting the coverage you need.

Coverage

Plans vary in terms of the coverage they provide. Some plans cover only basic medical services, while others are more comprehensive.

Here are some common types of coverage that health insurance plans may provide:

  • Inpatient care: This covers the cost of hospital stays, including room and board, nursing care, and other related expenses.
  • Outpatient care: This covers the cost of medical services that do not require an overnight hospital stay, such as doctor visits, diagnostic tests, and outpatient surgeries.
  • Prescription drugs: This covers the cost of prescription medications that are prescribed by a healthcare provider.
  • Emergency care: This covers the cost of emergency medical services, such as ambulance rides and emergency room visits.
  • Mental health and substance abuse treatment: This covers the cost of mental health services, such as therapy and counseling, as well as substance abuse treatment.

Important Note:

Not all plans cover every aspect of healthcare expenses. For example, some insurance plans may not cover dental or vision care. There might also be restrictions on the healthcare providers you can see.

The plan you pick can require you to only receive care within a certain network. Seeking medical care outside the established network is referred to as “out-of-network” care. This implies that you will be responsible for bearing the expenses.

Medical Costs and Savings

Normally, when you require medical attention, you’ll need to arrange for your own payment.

This is called your out-of-pocket costs.

Out-of-pocket costs can include:

  • Deductible: This is the amount you must pay for healthcare services before your health insurance coverage begins.
  • Copayment: A fixed amount you pay for a healthcare service, such as a doctor visit or prescription medication. This refers to a payment made once your deductible has been fulfilled.
  • Coinsurance: The portion of the healthcare service cost you’re accountable for covering after your deductible has been met.

Savings

There are a few ways you can save money on your health insurance:

  • Premium tax credit: If you qualify, you can get a premium tax credit that lowers your monthly premium. You can find out if you qualify for a premium tax credit when you apply for coverage in the Health Insurance Marketplace. [1]
  • Cost-sharing reductions: If you qualify, you can get extra savings on out-of-pocket costs like deductibles, copayments, and coinsurance. You must pick a plan in the Silver category to get these extra savings on out-of-pocket costs. [2]
  • Medicaid or CHIP: If your income is low, you may qualify for Medicaid or the Children’s Health Insurance Program (CHIP). These programs provide free or low-cost health coverage to eligible individuals and families. [3]

Understanding what these are is important for managing finances around your plan. They can have a significant impact on your overall expenses. In addition, some plans may have limits on the amount of out-of-pocket costs you are responsible for paying each year (Out-of-pocket Maximum).

Types of Marketplace Insurance Plans

When it comes to health insurance plans, there are several types that you can choose from. There are plans that limit your choice of health care providers or recommend you receive care from the plan’s network of doctors, hospitals, pharmacies, and other health care providers. Some plans cover a greater share of the expenses when seeking services outside the plan’s network.

Preferred Provider Organization (PPO)

A type of health care plan that contracts with medical providers, such as hospitals and physicians, to create a network of participating providers. You have lower costs when using providers within the network. For an additional charge, you can use doctors, hospitals, and care providers outside the network.

Health Maintenance Organization (HMO)

A type of health insurance that typically limits coverage to care provided by doctors who work for or have a contract with the HMO. In general, out-of-network care is not covered, except in emergencies. To be eligible for coverage under the HMO, residency or employment within the service area might be mandatory. These organizations often provide integrated care and with a focus on prevention & well-being.

Point of Service Plans (POS)

A plan where you incur lower costs by utilizing healthcare providers within the plan’s network. To make POS plans effective, obtaining a referral from your primary doctor to consult a specialist is required.

Exclusive Provider Organization Plan (EPO)

A managed care plan where services are covered only when you go to doctors, specialists, or hospitals in the plan’s network. In case of emergencies, services are not covered.

The type of insurance plan you choose will depend on your individual/family needs and preferences. Consider looking at cost, network size, doctors, and plan flexibility when making a decision.

Health Insurance and Medical Care Explained

Here’s an overview of various medical care types and how they’re usually covered by health insurance.

Primary Care

Covers regular check-ups, physicals, and illness-related visits. Most plans often include primary care coverage, allowing you to select providers within your plan’s network. Confirm provider network details with your insurer to avoid unexpected expenses.

Specialist Care

If specialized medical attention is required, like from a dermatologist or cardiologist, your health insurance might cover it. Certain plans mandate a referral from your primary care provider before seeing a specialist. Verify your insurer’s guidelines for specialist care.

Preventive Care

Maintaining wellness and detecting potential health risks early is very important. Most insurance plans encompass preventive services such as yearly check-ups, immunizations, and cancer screenings. Some plans even offer these services at no cost. Check with your insurer to know your coverage specifics.

Fertility Treatments

For those facing fertility challenges, some health insurance plans cover fertility treatments. However, coverage varies widely, with some plans not covering these treatments at all. Examine your plan to understand what’s covered and your potential out-of-pocket expenses.

Enrollment in Health Insurance (Use the Health Insurance Marketplace)

The Health Insurance Marketplace is frequently called the “health insurance exchange”, or “Marketplace.” You may qualify for subsidies—also known as premium tax credits—when you purchase health insurance plans through the marketplace, depending on your income and whether you are eligible for other health insurance coverage.

Open Enrollment

An annual period of time each year when you can enroll/renew in a health insurance plan. This period usually lasts for a few months from November  – December. During open enrollment, you can enroll in a new plan or make changes to your existing plan.

You must enroll by Dec. 15 to get coverage that begins Jan. 1 of the upcoming year. Some state exchanges have different open enrollment dates. It is important to pay attention when your state’s exchange is open.

Missing the open enrollment period means waiting until next year to enroll. So make sure you mark your calendar and don’t miss the deadline!

Special Enrollment

If you miss the open enrollment period, don’t worry. You may still be able to enroll in a plan during a special enrollment period (SEP). This period is triggered by a qualifying life event (QLE).

4 Common Types of Qualifying Life Events:

  1. Loss of Health Insurance:
    • Turning 26 and losing parental coverage
    • Job-based, COBRA, or student plan loss
    • Medicare, Medicaid, CHIP eligibility loss
    • Non-payment-related insurance loss
  2. Changes in Household:
    • Marriage, separation, divorce
    • Birth, adoption, foster care
    • Death of a policy-covered individual
  3. Changes in Residence:
    • County/zip change
    • School-related moves for students
    • Work-related moves for seasonal workers
    • Shelter transitions
    • U.S. territory/foreign country shifts
  4. Changes to Eligibility:
    • Income shifts affecting Medicaid eligibility
    • ACA plan holders becoming tax-credit eligible
    • Federally recognized tribe membership
    • New U.S. citizens eligible for Marketplace coverage
    • AmeriCorps VISTA service changes
    • Military discharge
    • Release from incarceration

This period usually lasts for 60 days after the event occurs. So make sure you act quickly to avoid missing the deadline.

To enroll in a plan during either open enrollment or a special enrollment period, you’ll need to visit your state’s health insurance marketplace or use Marketplace America’s, “See Health Plans & Prices” button. From that point, you can evaluate plans and select the one that suits your needs.

Health Plan – Enrollment Options

You have several options for applying:

  • Online via the Marketplace: You can begin this process by logging in or creating an account for your preferred Marketplace.
  • Local Assistance: Find a directory of local navigators near you that offer assistance.
  • Certified Enrollment Partners: Opt for approved partners like insurance companies or online health insurance sellers.
  • By Phone: You can get aid by calling a Marketplace call center to complete your application, understand details, explore options, and enroll.
  • Paper Application: Get eligibility results within 2 weeks via mail by using a paper application.

Agent or Broker

Agents or brokers have prior knowledge of healthcare plans and how to navigate the Marketplace. They can assist you in selecting the best policy for you that meets your budget and medical needs. There are no fees attached to this service.

The brokers and agents are compensated directly by the health insurance company. 

You don’t pay a fee to work with them and your premiums will not be hiked up because you used their services.

If you need help with the application process, you can consult a licensed agent at Marketplace America. Typically, there is no fee charged for assistance (i.e. free assistance).

Private Insurance Brokers

Private insurance brokers can aid you in choosing the optimal plan by presenting options from insurance companies and web brokers. However, for subsidy eligibility, applying through the Federal Marketplace or your state exchange is recommended.

Buying Directly from an Insurer

The Health Insurance Marketplace isn’t your only option for getting a health insurance plan. Others might discover more fitting or cost-effective policies beyond the marketplace. Remember that when browsing a single insurer’s website, you are only viewing their plans.

All policies under the Affordable Care Act (ACA) sold outside federal or state exchanges must adhere to the ACA’s minimum essential coverage criteria. These encompass pre-existing conditions, essential health benefits, and free preventive care before hitting your deductible.

Short-Term Health Insurance Plans

Beyond the exchanges, non-ACA-compliant short-term plans (up to 12 months) are available. They offer fewer essential health benefits and more exclusions.

Some view partial coverage as preferable to none, as short-term insurers position their plans as budget-friendly alternatives to ACA-compliant coverage.

Yet, these lower costs do not equal similar coverage. Short-term plans often exclude pre-existing conditions and impose strict limits on required benefits. Some of these benefits are:

  • Prescription Drugs
  • Mental Health Services
  • Maternity Care

This leaves individuals with substantial out-of-pocket expenses.

The apparent affordability of short-term plans stems from limitations imposed on applicants and coverage.

Exercise caution with this insurance type, as it might lead to unexpected higher costs. If using a private exchange, be cautious about alternatives to standard plans.

Remember that without using the Federal Marketplace, subsidies are unavailable. If your state has its own Marketplace, buy coverage there to be eligible for subsidies.

While higher income might negate subsidy concerns, a decrease in income next year could change your eligibility. Subsidies align with your yearly income at the time of insurance purchase. Initial sign-up provides an estimate based on predicted earnings.

Health Plan Metal Tiers: Bronze, Silver, Gold, and Platinum

Plans are categorized into four main levels, each reflecting different coverage levels and cost structures. These categories help individuals choose a plan that aligns with their healthcare needs and budget.

Bronze

Bronze plans typically have lower monthly premiums but higher out-of-pocket costs when you receive medical care. They can be a good choice for individuals who don’t expect to use medical services frequently but still want essential coverage.

Silver

Silver plans strike a balance between monthly premiums and out-of-pocket costs. They often offer moderate premiums while providing more coverage for medical services, making them suitable for those who anticipate regular healthcare needs.

Gold

Gold plans have higher monthly premiums but lower out-of-pocket costs when you receive medical care. These plans are suitable for individuals who require frequent medical attention and want more comprehensive coverage.

Platinum

Platinum plans come with the highest monthly premiums but the lowest out-of-pocket costs for medical services. They provide extensive coverage and are ideal for individuals who have frequent medical needs and are willing to pay higher premiums for reduced costs when seeking care.

 

How Costs are Shared Between You and Your Insurance Plan

Projected Averages for a Typical Population. Your Costs Will Differ, Unrelated to Care Quality.
Plan Category Percent The Insurance Company Pays The Percent You Pay
Bronze
60%
40%
Silver
70%
30%
Gold
80%
20%
Platinum
90%
10%

 

Government Health Insurance Programs

There are several programs on offer that may be able to help you afford health insurance. Here are some of the most common programs that are available:

Medicaid: Affordable Health Insurance for Low-Income

Medicaid helps with getting health coverage to those with limited incomes. If you qualify, you gain access to diverse medical services like doctor appointments, hospital stays, prescriptions, and more. Eligibility criteria differ by state, generally encompassing low-income and other prerequisites. To confirm eligibility and apply for Medicaid, connect with your state’s Medicaid program.

Medicare: Government Health Coverage for Seniors and More

Medicare offers health insurance to individuals aged 65 and older, along with those facing specific disabilities and chronic conditions.

Medicare is comprised of different parts:

  • Part A for hospital coverage
  • Part B for medical expenses
  • Part C for Medicare Advantage
  • Part D for prescription drugs

Eligible individuals can register for Medicare through the Social Security Administration.

CHIP (Children’s Health Insurance Program): Health Coverage for Low-Income Children

CHIP is health insurance for kids in low-income families. If eligible, children gain access to various medical services, such as doctor appointments, hospital care, prescriptions, and more. CHIP eligibility varies by state but typically covers children under 19 who meet specific criteria. To assess eligibility and apply for CHIP, reach out to your state’s CHIP program.

Navigating Health Insurance with Pre-Existing Conditions

Having a pre-existing medical condition requires a clear understanding of its impact on your health insurance choices.

A pre-existing condition refers to a health issue existing before your insurance coverage starts. Historically, insurers could decline coverage or charge higher rates. However, the Affordable Care Act prohibits denial or higher charges.

For individuals, enrollment is possible during Open Enrollment. Numerous plans covering pre-existing conditions are available, often with subsidies to lower monthly premiums & costs.

If you miss Open Enrollment, a Special Enrollment Period might still apply if you experience specific life events.

It’s important to note that some older plans (grandfathered plans) may not cover pre-existing conditions. However, you can switch to a Marketplace plan if your grandfathered plan period ends.

Obtaining Health Insurance in Retirement

  1. Under 65 and Lost Job-Based Insurance: If you’re retired but under 65 and have lost job-based insurance, use the healthcare Marketplace. Losing essential coverage grants a special enrollment window. If your income and household size meet certain criteria, you might receive assistance via the premium tax credit, reducing your health insurance premium expenses.
  2. 65 or Older: As a retiree aged 65 or older, you’re eligible for Medicare and Medicare Advantage. Even if your 65th birthday is mid-year, you can apply for a short-term Marketplace plan to bridge until Medicare coverage starts.

Getting Health Insurance with a Disability

  1. Various Scenarios Covered: If you have a terminal illness, need daily care assistance at home/group setting, reside in long-term care, have a disability, or face employment limitations due to a condition, options are accessible. Disabilities fall under pre-existing health conditions. Hence, plans cannot increase costs based on your health situation before coverage initiation.
  2. SSI Coverage via Medicaid: Apply for Supplemental Security Income (SSI) coverage through Medicaid. In most states, SSI approval automatically grants Medicaid coverage based on disability. However, some states don’t ensure Medicaid even with SSI, so verify your state’s rules for clarity before assuming anything.

Getting Health Insurance as a Self-Employed Individual

If you’re a business owner, you can secure health coverage via the Marketplace. Depending on your income and family size, you might be eligible for premium credits and insurance savings.

Marketplace plans enable business owners to cover their spouses and children. The extent of healthcare savings is estimated based on your projected income for the year of application, not your income from the preceding year.

In Summary

Our aim was to help you understand your available health insurance options. Don’t forget to refer back to our guide on your insurance journey. Keep this bookmarked and close to aid you in making the best decisions for your health.

We covered:

  • The need for affordable health insurance and the complexity of the process due to numerous options available.
  • Different questions people have when picking the best health insurance plan.
  • The concept of health insurance, which helps pay for healthcare services like doctor visits, hospital stays, and prescription drugs.
  • Various types of coverage provided by health insurance plans, such as inpatient care, outpatient care, prescription drugs, emergency care, and mental health/substance abuse treatment.
  • Out-of-pocket costs associated with health insurance, including deductibles, copayments, and coinsurance.
  • Ways to save money on health insurance through premium tax credits, cost-sharing reductions, Medicaid, or CHIP.
  • Explanation of health plan metal tiers: Bronze, Silver, Gold, and Platinum, with details about their coverage levels and costs.
  • Overview of government health insurance programs like Medicaid, Medicare, and CHIP, which offer coverage for low-income individuals, seniors, and children.
  • Navigating health insurance with pre-existing conditions and options available during Open Enrollment or Special Enrollment Periods.
  • Obtaining health insurance in retirement, even if you’re under 65, and options for those aged 65 or older.
  • Getting health insurance with a disability, including coverage options and Medicaid eligibility.
  • Health insurance options for self-employed individuals, including premium credits and savings through Marketplace plans.

Answers To Your Insurance Questions

Do Copays Count Towards Out-of-pocket Maximum?

Payments towards your plan’s deductible, coinsurance, and copays contribute to your out-of-pocket maximum. Upon reaching this maximum, your plan covers 100% of the allowed amount for covered services.

Do You Pay 100% Before Deductible?

A deductible is the sum you pay for healthcare services before your insurance coverage takes effect.

 

Here’s how it operates: Suppose your plan’s deductible is $3,000. You’ll cover the full costs of eligible healthcare expenses until the accumulated bills reach $3,000.

 

After this point, you start sharing costs with your plan through coinsurance payments.

How Many Americans Have No Health Insurance?

In 2022, 8.4% (27.6 million) of Americans of all ages were without health insurance, which is a decrease from 10.3% (33.2 million) in 2019. Similarly, during this timeframe, 4.2% (3 million) of children lacked health insurance, down from 5.1% (3.7 million) in 2019.

To see the full report click the provided link:
https://www.cdc.gov/nchs/pressroom/nchs_press_releases/2023/202305.htm

What Are the Disadvantages of EPO Health Insurance?

An EPO’s drawback is that if members need to consult an out-of-network provider, they’re responsible for all expenses without any reimbursement. Moreover, emergency services beyond the EPO’s network might not be covered. After enrolling in a plan, there are stringent rules governing eligibility to make changes.

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