Without a health insurance plan, you could be on the hook to pay an expensive medical bill next time you visit a hospital. There’s a plan out there for everyone, so here’s a look at the types of health insurance plans to find the right one for you to avoid medical debt.
If you don’t have a good health insurance plan, now’s the time to get one.
Public or Private?
You can get health insurance through various public and private sources. State and federal governments offer public health insurance while the health insurance industry offers private health insurance.
Whether you should get public or private health insurance depends on what you can afford and what your health-care needs are.
How do you get public health insurance?
You can apply through the federal government or your state government. The federal government offers Medicare to individuals over 65, younger individuals living with disabilities, and individuals with end-stage renal disease.
Your state government, with funding from the federal government, offers Medicaid to many more qualifying individuals, notably low-income individuals and families, and pregnant women.
Other public health insurance plans include the Children’s Health Insurance Program (CHIP), which offers medical coverage to children and teenagers who don’t qualify for other medical plans, and Tricare, which offers medical coverage to military members and their families.
How do you get private health insurance?
You can apply for a private medical plan through your employer or a private health insurer. These types of health insurance plans tend to be more expensive than public plans. However, you get to choose your health-care provider, and they usually cover more expenses which helps you avoid medical debt.
What are the different types of private health insurance plans?
Private health insurance is big business. A couple of years ago, in 2017, written premiums from private health insurance companies totaled an estimated $867.5 billion across many different types of health insurance plans.
Here are a few of the most popular ones:
Health maintenance organization (HMO)
This type of health insurance typically only covers care from doctors who work for the HMO, and you must choose a primary care doctor from among this plan’s participating doctors. Unfortunately, this means that coverage under these plans is usually limited to specific areas. That said, some HMOs cover some medical care emergencies outside coverage areas.
Exclusive provider organization (EPO)
Similar to HMOs, these plans cover health-care services only from doctors who work for the EPO network and won’t cover care received outside of it. However, unlike HMOs, you don’t need to choose a primary care doctor, nor do you need a referral from one to receive covered specialist services and treatments.
Preferred provider organization (PPO)
This type of health insurance plan offers you the freedom to seek health care from whatever provider you want within the plan’s network of participating providers. The plan does cover health care outside the plan’s health network, but for an additional cost.
Point-of-service (POS)
Similar to PPOs, POSs allow you the freedom to choose your health-care provider within the plan’s health network, and they also allow you to venture outside its network for care at an additional cost. However, this plan only covers specialist care if your primary care doctor refers you.
How do you choose the best plan?
Look at your financial situation and health-care needs. If you’re an individual living on a lower income or supporting a family on a lower income, you may want to consider a public health insurance plan, such as Medicaid, because it’s less expensive than private health insurance. If you’re a younger individual living with a disability, Medicare might be for you.
On the other hand, if you can afford private health insurance, you may want to consider going that route, since private health insurance plans, in general, offer greater care flexibility and cover more medical expenses.
Pro tip! If you’re thinking about private health insurance, check out this list of top-rated health insurance providers.
The Bottom Line
Finding great health insurance is a wise step to take now to avoid medical debt from a hefty bills later. However, if you find yourself already struggling with medical debt, check out this comprehensive article to learn how to manage it.
This article is provided by NAIFA partner EveryIncome.
