Many people find the array of health insurance options available to them to be quite confusing. There are various different types of plans on the market, all with different levels of coverage and organizational structures.
Health insurance has historically been difficult to understand, and this phenomenon has only gotten stronger with the introduction of the Affordable Care Act, commonly referred to as “Obamacare.” This piece of legislation introduced many new regulations that all Americans had to abide by. The effects that these laws have had on the plans available on the open market is a point of confusion for many people.
For example, a large percentage of people think that it is now illegal to buy private health insurance plans yourself, instead of getting them through an employer. This is not true. However, the plans that one buys privately have to meet the Affordable Care Act regulations just like other private health insurance plans.
Most plans that are available when comparing quotes online have been updated to meet the regulations, but you shouldn’t assume that this is the case. To understand the health insurance market in the post-Affordable Care Act era, you need to take a look at every type of health insurance plan available.
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The First Thing You Need to Understand: Benefit Levels
No matter what type of plan you end up purchasing after comparing health insurance plans online, the levels of benefits are the same. The levels range from bronze at the low end to platinum at the high end.
Catastrophic health insurance is also available for certain people under age of 30.
– Catastrophic Health Insurance
As the name implies, it is only for serious and unexpected medical expenses. You pay the smallest amount in percentage, less than 60 percent total.
It is important to note that even catastrophic plans have to cover three primary care visits and preventative care. This is due to the regulations imposed by the Affordable Care Act.
This rule applies even if you have not met your deductible.
– Bronze Health Insurance
This is the cheapest and least comprehensive tier of benefits available to most people. Bronze tier plans pay an average of 60 percent of your health care costs. This leaves 40 percent for you to pay out of pocket.
Bronze plans are the cheapest health insurance plans available next to catastrophic plans.
– Silver Health Insurance
Silver health insurance plans are one step up from bronze plans. They cost a little more, but also provide more coverage.
Silver plans cover an average of 70 percent of your health care expenses, leaving you 30 percent to cover out of pocket.
– Gold Health Insurance
The second most comprehensive plans on the market are classified as gold plans. They cover an average of 80 percent of their policyholder’s medical expenses, leaving them only 20 percent to cover out of pocket.
Gold plans are the most popular tier of health insurance plans.
– Platinum Health Insurance
Platinum plans are the most comprehensive on the market. They cover 90 percent of your medical costs, on average. This leaves you to cover the remaining 10 percent.
As you might have guessed, platinum tier plans are the most expensive. However, a large number of people find the extra expense to be worth the peace of mind.
Types of Health Insurance Plans in the United States
There are two main types of health insurance plans currently available in the United States. Each has their pros and cons. They all provide different levels of coverage different ways and at varying price points.
You should look into all types of plans very carefully when comparing health insurance quotes online.
Health Maintenance Organization (HMO) Plans
HMO plans are one of the most common types of plans available today, along with PPO plans. They offer the smallest amount of choice when it comes to picking your health care providers, but they also require the least amount of paperwork.
HMO plans are centered around a primary care provider, usually a family medicine doctor (also known as a general practitioner). Generally, you need a referral from your primary caregiver to see a specialist. There are some exceptions to this rule.
Check with your health insurance company if you’ve already bought the plan, or check before you buy when you’re comparing insurance providers online.
In an HMO plan, you can see any doctors in your network. A visit to an out of network doctor will end up with you footing the entire bill yourself. The exception to this is a trip to the ER, which is always covered at in-network rates. It is important to note that while a trip to the ER is covered, non-emergency care that you receive afterward, even if it is in the same visit, can be billed to you at the full rate.
– What You Have to Pay for an HMO Plan
There are several different types of charges that those with HMO plans have to pay. These charges include premiums, which are the monthly bills. They also include deductibles, which is the amount you have to pay for before your insurance kicks in.
After the deductible is reached, the insurer will pay for 100 percent of qualifying charges. Finally, those with HMO plans have to pay co-pays. A co-pay is a fee that the policyholder pays at the point of service.
It is important to note that those with HMO plans don’t have to file claims, which can be a real headache for those with other types of health insurance.
(PPO) Preferred Provider Organization Plans
PPO plans offer more freedom but generally come with higher costs and more paperwork. This trade-off is worth it for some people, but not for others. Be sure to consider your options carefully before pulling the trigger on a PPO plan or any other sort of plan.
PPO plans give you a good deal of freedom when it comes time to choose your health care providers, more than an HMO plan. Keep in mind that you don’t have to get a referral to see a specialist when you have a PPO plan. This is a huge benefit for many people.
The charges that those who have PPO plans have to pay are similar to the charges paid by those with HMO plans. These charges may include premiums, deductibles, copays, and various other costs.
As with an HMO plans, there is a network of healthcare providers that you are supposed to use, and trips to health care providers that are not in the network will cost extra.
What to Remember
The most important thing to take away from this article is the benefit level system. Keep the percentage of coverage in mind when you are looking for a new health insurance plan. Also, remember that HMO plans are cheaper but less versatile, while PPO plans are the opposite.
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