PPO (Preferred Provider Organizations) – A type of health plan that allows you to choose the doctor/specialist which you prefer without a referral. However, if you choose to see a doctor or specialist or go to a hospital that is outside of the network (without first getting a referral) you will pay higher rates due to the carrier taking on less of the cost of the medical expense.
HMO (Health Maintenance Organizations) – a type of health plan that allows for treatment by only those doctors/ specialists that work at hospitals that are in network. HMO plans will not cover expenses for out-of-network treatment. As such, it is important that you first check with your health plan provider (carrier) to see if your preferred doctors are in network prior to your visitation.
POS (Point-of-Service) – A type of health plan that requires you to see doctors/specialists at hospitals that are in network in order to take advantage of better pricing. Like an HMO, POS plans require that you get a referral from your primary care physician in order to visit a specialist. Although you are allowed to see out-of-network doctors, doing so increases out-of-pocket expenses.
HSA (Health Savings Account) – is not a health plan, instead it is a type of savings account that allows for a portion of your income to be allocated specifically to cover medical expenses. The tax advantage to a HSA is that the money that is invested into your HSA is done on a pre-tax basis, that is, you will not be taxed on your HSA invested earnings.
The HSA can be used to pay for a number of medical expenses, such as: deductibles, copayments, prescriptions, etc. and by using pre-tax dollars to pay for these medical expenses your overall expenditure on health care is lowered.
Some health insurance companies offer HSAs for their high deductible plans. Also, some banks and other financial institutions offer HSA plans.
Group Health (Employer)
A group health insurance plan provides coverage to members of a group that tends to be employees of a company or members of an organization. Group health plans are advantageous because they allow for lower premiums by enabling the insurance carrier to more easily assess the risk. It is harder to gauge risk of individuals than it is to assess across a group of individuals.
Although large groups tend to have lower rates/premiums, much smaller groups are subject to large “premium swings” where premiums can drastically increase or decrease by the addition or removal of plan members that pose a greater risk to the carrier, that is, individuals who are elderly, use tobacco products, live in areas of high crime rates, etc. The impact of the addition or removal of said individuals is far less pronounced in a larger group.
Group health plans can offer several different plan options (i.e. PPO, HMO, POS, etc.) so that group members can select a plan that best serves them and their family’s health care needs while fitting their budgets.
Although most group health plans are employer-sponsored, that is not the only way to become a member of a group health plan and take advantage of their benefits.
Both individual/family plans and group health plans offer 4 major plan categories: Bronze, Silver, Gold and Platinum, each of which offer various levels of increasing coverage (from Bronze having the least amount to Platinum having the most amount of coverage).
Bronze health plans typically offer the least amount of coverage in terms of covered medical and prescription expenses. Generally, bronze plans cover roughly 60% of medical expenses. They offer the lowest premiums yet the highest out-of-pocket expenses when healthcare is needed.
Silver health plans offer lower deductibles and more medical and prescription expense coverage than Bronze health plans, with expense coverage at roughly 70%; their premiums tend to be higher, however.
Gold health plans offer even lower deductibles than Silver health plans and even better medical and prescription expense coverage, at roughly 80% of medical expenses being covered. Their maximum out-of-pocket expenses tend to be far lower, the tradeoff, however, is that their premium is much higher.
Platinum health plans offer even lower deductibles still and the best medical and prescription expense coverage, at 90% coverage. These are best health insurance plans, but they cost the most out of all major plan types.