Health Insurance Options for Individuals and Families

It's easy to get confused when talking about insurance. Here is a short guide to help you understand the pros and cons of several of the most popular health insurance options.

Health Maintenance Organization (HMO) Plans

An HMO is the most popular type of insurance plan in existence. It basically operates on a network system, where members receive care from doctors and hospitals that are within the network. These providers have entered an agreement with the HMO that they will pay a set price for each medical treatment received. With this plan, you must choose a primary care physician who must refer you to a specialist within the network if needed.

Providers who are part of an HMO generally focus on preventative care and wellness. Expect to be encouraged to get yearly physicals and be up to date on immunizations. There are usually low out of pocket costs with this plan and no lifetime maximum. However, if you receive care from a provider that is out of network, you will be responsible for the charges.

Preferred Provider Organization (PPO) Plan

A PPO is similar to an HMO but with a few key differences. There is still a network of providers, but you do have the option of seeking care outside of the network. You do pay more if you go out of network, but the entire bill will not rest on your shoulders. You can see a specialist without a referral from your primary doctor. This type of plan is ideal for those who don't want to choose from a limited number of providers and want to be able to seek the opinions of specialists without prior approval.

Short Term Medical Insurance

Short-term plans are also called temporary health insurance. These plans have a termination date that you choose when you apply. This type of plan is generally chosen by recent college graduates who do not have employee sponsored benefits, those who are waiting for group coverage to begin or for those who are between jobs. It will provide coverage for major medical, surgical and hospital expenses if the illness or injury is covered under the plan.

Consumers are drawn to these plans because they are generally very affordable. Short term insurance has the best rates of any type of health insurance. Also, coverage usually begins immediately or within 24 hours.

Health Savings Account (HSA)

If you don't have an actual insurance plan, consider opening a health savings account. These are sometimes combined with a high deductible health plan. The money you put into an HSA is tax-free and can be used for all medical expenses. It can also be used for such things as prescription drugs and bandages. You are the owner of the money in your account and if you should die, the money will be transferred to your spouse or other designated beneficiary tax-free.

This is a great way to pay for your medical expenses tax-free, and your contributions can be subtracted from your yearly tax bill.

We hope this short summary has helped you to understand some of the options that are available for healthcare insurance today.

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