There are three basic types of individual health insurance coverage available, but there are many types of policies available in these 3 groups. Begin by getting an understanding of the basic types of plans, and then choose which policies you need under those plans. Most types of health insurance will have deductibles, copays and coinsurance that must be paid out of pocket.
The type of plan designates how your health insurance works, such as belonging to a care provider network. The three basic plans have similarities and difference which may affect how well the plan would work for you. For example, if you have a family doctor who is not part of your HMO network, a POS or PPO plan may be a better choice.
- POS - Point of Service insurance is also called Fee for Service. Under this type of policy, you can see the care providers of your choice, but must pay a percentage of each visit or procedure out of pocket. In many cases, you will have to pay the full cost of the care out of pocket, and then send forms to your insurer for reimbursement.
- HMO - Under an HMO insurance plan, you are restricted to care from providers belonging to the plan's network. The name of the plan comes from the way care is administered, where you visit a primary physician who refers you to specialists as needed. By having your care managed by the primary physician, the plan saves money and reduces unnecessary visits to specialists.
- PPO - The Preferred Provider Organization is like a mixture of POS and HMO plans. You do not have a primary physician who manages your care, but there is a network from which to choose your care providers. Under a PPO, you can go outside the network, but generally have to pay the difference between a network caregiver and the out of network provider you choose to visit.
Individual Policy Types
The type of policy is either chosen when you purchase a health plan, or added as a rider to an existing plan. In some cases, such as dental or long term care, you have to purchase the policy separately from your primary health plan.
- Major Medical - This is a typical Health insurance plan.
- Hospitalization and Surgical - This type of policy is designed solely for hospitalization and surgery, room and services.
- Hospital Indemnity - This sets a per-day amount of coverage for hospital stays.
- Special Care or Specified Disease - This is a special coverage for only the types of illness specified in the policy.
- Accident Only - This policy does not cover illnesses or diseases, only accidental injury.
- Dental - Dental coverage is usually purchased separately or as a rider.
- Long Term Care - This is a total care policy for those who become unable to take care of themselves for extended period.