In order to make sure that you are covered in the event of a medical emergency it is important to be aware of the different types of medical insurance. If you are uninsured, or do not have the necessary medical coverage, any major medical problem that you encounter will have a significant impact on your personal finances.
Preferred Provider Organizations (PPOs) are the most common type of medial insurance plan. A PPO limits the doctors and facilities that you can use to those that are in network. With a PPO you will typically have to pay a small co-pay for doctor visits or hospitalizations, while the insurance company covers the rest of the cost. Depending on where you live, and the strength of your medical insurance provider, you may have a wide variety of doctors and facilities to choose from, or your choices could be very limited. It is important that you look into which doctors and facilities are in network before selecting a PPO.
The less expensive your copay and the higher your insurance’s coinsurance contribution, the more expensive your monthly premium will be. Other coverage, such as coinsurance for mental health treatments and substance addiction, varies by state. If you are already undergoing medical treatment for a condition, make sure you discuss how your insurance will cover your particular issue.
A recent newcomer to the insurance industry is the HDHP. This High Deductible Health Plan is used in conjunction with a pre-tax savings account. You will have the option of either a Health Savings Account or a Family Savings Account. With an HDHP you will pay all of your health costs up-front, with the exception of preventative treatments. Most preventative treatments are covered in full by your plan. The money you contribute to the HSA and the FSA can go towards doctor’s office visits, prescription drugs, and even vitamins. Money invested in your FSA can be used for child-care. Unlike a PPO you can have your choice of any doctor. There might be a list of doctors that will give you a small discount if you use their services.
Finally, the HMO, or Health Maintenance Organization is an insurance option for older adults. HMO plans vary widely by state. In all HMO plans, however, you will have to select a primary care provider. Before you receive any specialist treatment, you will have to go see your PCP. He or she will issue you a referral. Like a PPO, HMO plans operate using copays and coinsurance.
