Health Insurance Comparison
Health insurance assists in paying for your medical care. Persons usually get health insurance through an employer, Medicare, or Medicaid. The Affordable Care Act also created exchanges for individuals to find individual and non-group health plans. Health insurance works this way: You visit a healthcare provider. You may have to pay a copay immediately. After your health care services, the provider bills your insurance carrier. The insurer reviews the services and pays what it believes it owes the health care provider. In most health insurance plans; the insurer reimburses the bulk of the costs. The patient pays the remaining expenses.
Types of Health Insurance
Many Americans get their health insurance through an employer.
Nearly half of United States residents get their health insurance through an employer. This is usually more cost-effective than getting an individual health plan. An employer helps pay for your coverage and will likely get a better rate as compared to individual insurance. Employers usually offer employees multiple health plan offerings that vary based on premiums, out-of-pocket costs, and provider networks. PPOs are the most common type of employer-sponsored plan, though high-deductible health plans have become a more common choice in recent years.
Medicaid and Medicare Health Insurance
Medicare and Medicaid cover more than one-third of United States residents combined. Medicare is typically based on age or disability. People 65 and over are qualified for Medicare, as are people under 65 with disabilities or those with end-stage renal disease. Medicaid is based on income. Every state has its income requirements and benefits. Both Medicare and Medicaid are typically lower-cost options than employer-sponsored insurance or an individual plan.
Almost 7 percent of Americans have individual or non-group health insurance. Insures provides these plans through the Affordable Care Act marketplace and outside of the market. These health insurance plans, particularly those outside the marketplace, are often more expensive than employer-based plans. Plans within the marketplace may provide tax breaks and subsidies for lower-income Americans. Those discounts are not offered in the individual market outside of the exchanges.
PPO, HMO, and High-Deductible Health Plan
The three most common kinds of health insurance plans in employer-sponsored health insurance are preferred provider organization (PPO), high-deductible (HDHP), and health maintenance organization (HMO) health insurance plans. Here are the differences:
PPO is the most common form of health insurance plan sponsored by employers.
PPO: The most common form of health insurance plan. PPOs cover about half of U.S residents with employer-sponsored health insurance. PPOs normally have higher premiums, but with lower out-of-pocket costs when you need health care services. PPOs also provide more flexibility. Members can see in-network and out-of-network doctors. Nevertheless, you will likely have to pay more to see an out-of-network provider.
HDHP: As the name implies, HDHPs have high deductibles. They usually have cheaper premiums, but you will pay more out-of-pocket when you need health care services. Slightly less than one-third of U.S. residents in an employer-sponsored plan have an HDHP.
HMO: HMOs have lower premiums as compared to PPOs and fewer out-of-pocket costs than HDHPs. HMOs have restricted provider systems. That means you’ll perhaps only be able to see in-network providers. If you get care outside of your network, you may have to pay for all the services without any support from the insurer. HMOs also need a referral from a primary care provider if a patient needs to see a specialist.
What is the Cost of Health Insurance?
Health insurance costs differ by plan. Medicaid typically costs the least. Medicare is also cheaper than employer-sponsored health insurance. ACA plans’ costs differ depending on your income. The Affordable Care Act allows subsidies and tax credits for people for lower-income individuals. Here is more information about average annual premium costs for different plan kinds:
- Original Medicare – Part A generally free; Part B $1,600
- Medicare Advantage – $336
- Medicaid – varies by income
- Individual/ACA – $7,200
- Employer-sponsored – $1,186 individual/$5,547 family
- COBRA – up to 102 percent of coverage costs
References and Resources