What is Health Insurance & 10 Types of health insurance in USA
Health insurance in the United States is any program that helps pay for medical expenses, whether through privately purchased insurance, social insurance, or a social welfare program funded by the government.
What is Health Insurance?
A health insurance policy extends coverage against all medical expenses incurred owing to accidents, illness or injury. An individual can avail such a policy against monthly or annual premium payments. During this period, if an insured meets with an accident or is diagnosed with a severe ailment, the expenses incurred for treatment purposes are borne by the insurance provider.
In addition to medical expense insurance, “health insurance” may also refer to insurance covering disability or long-term nursing or custodial care needs. Different health insurance provides different levels of financial protection and the scope of coverage can vary widely, with more than 40% of insured individuals reporting that their plans do not adequately meet their needs as of 2007.
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Types of health insurance in USA
1 Health Maintenance Organization (HMO) Health Insurance Plans
HMOs are one of the most popular types of health insurance plan in USA, you can purchase. With this plan, an entire network of health care providers agrees to offer you its services. You have to select a primary care provider (PCP) who coordinates all of your health services and care. This is best type of health insurance in USA.
2 Exclusive Provider Organization (EPOs) Health Insurance Plans
3 Point of Service (POS) Health Insurance Plans
A POS is a Point of Service group health insurance policy. POS plans combine features of an HMO and a PPO plan. Just like an HMO, POS plans may require employees to choose a Primary Care Physician (PCP) from the plan’s network providers. Generally, services rendered by the PCP aren’t subject to the policy’s deductible.
4 Preferred Provider Organization (PPO)
Under a PPO plan, both you and your family can see any health care provider in the insurance company’s network in USA, including specialists, without a referral. In most cases, you are not required to choose a primary care physician or to get referrals to see specialists.
5. Indemnity Health Insurance Plans
6 Health Savings Account (HSA) Health Insurance Plans
One alternative to traditional group health insurance is an HSA in USA. An HSA is a Health Savings Account. An HSA is a tax-favored savings account that is used in conjunction with an HSA-compatible high deductible health plan to pay for qualifying medical expenses.
7 Health Reimbursement Arrangements (HRAs)
There are six types of Health Reimbursement Arrangements (HRAs), each with their own uses and requirements. They are:
- Qualified Small Employer HRA (QSEHRA)
- Individual coverage HRA (ICHRA)
- Group coverage HRA
- Excepted benefit HRA
- Dental/Vision HRA
8 High Deductible Health Plan (HDHP) plans:
High-deductible plans cross categories. Some are PPO plans while others may be EPO or HMO plans. This type of health insurance has a high deductible that you have to meet before your health insurance coverage takes effect. These plans can be right for people who want to save money with low monthly premiums and don’t plan to use their medical coverage extensively.
9 Short-term health insurance plans:
Short-term health insurance plans do not comply with the Obamacare law. However, if you missed the Obamacare open enrollment period, a short-term health policy can provide you with some level of coverage you in the meantime.
10 Gap insurance plans:
Gap insurance plans are designed to provide an emergency safety net for unexpected medical costs, or other costs you may face in case of a medical emergency. If you don’t have a major medical policy, you might want to get gap insurance to get coverage in case of serious health issues. But, you can also get gap insurance even if you have a major medical policy or short-term policy, as a supplement to provide additional protection.
There are a more number of options for small businesses looking to offer health benefits, both inside and outside of the traditional group health insurance sphere.