Individual and family health insurance is a type of health insurance coverage that is available for individuals and families rather than coverage under the employer or organizations. When you have that option most people prefer to get their coverage through the employer but if that isn’t possible in your case, you’ll need to seek coverage on your own.
Usually, you’ll have two main options when start choosing individual health insurance plans. You can choose between qualified health plans or indemnity plans. There is a huge difference between those two main health insurance options.
Qualified Health Insurance Plans
Most people when talking about individual health insurance plans think of Qualified Health Care plans when they are thinking about purchasing health insurance on their own. This isn’t a surprise because those are managed care plans that meet Affordable Care Act (commonly known as Obamacare) requirements.
This means that those plans must include all essential healthcare benefits such as all preventative care (well-checks, routines, physicals, vaccinations, routine preventative screenings), maternity care, mental health benefits, pediatric, dental, vision, etc.
Most Qualified Health Care Plans are eligible for tax credit savings if you can qualify based on your income. Because of the included benefits managed care plans are usually more expensive than indemnity plans. They include all the pre-existing conditions with no medical underwriting necessary which means they need to accept your application regardless you are ill or healthy.
Types of Qualified Health Care Plans
There are several types of qualified health insurance plans including HMO, PPO, POS, and EPO plans. These types of plans usually have provider networks which means that they agree to treat patients within the plan’s network and the costs of the services are usually pre-determined.
High Maintenance Organization (HMO) Plan
With an HMO Plan, you will have no coverage under the plan’s network which means that you can only use doctors and hospitals which are listed in the HMO’s network. You will not get coverage out-of-network except for medical emergencies.
Also, you’ll need to establish your Primary Care Physician (PCP) who will coordinate your every medical need. This means you will always have to schedule an appointment with your PCP who will then provide you with a referral to see a specialist. With this plan most likely you’ll never have to fail a claim because your insurance company pays your provider directly.
However, an HMO plan has lower monthly premiums and copays, but those cost benefits don’t apply to out-of-network doctors.
Preferred Provider Organization (PPO) Plan
With PPO Plan You don’t need a referral to see a specialist nor do you need to choose your primary care physician. You can visit out-of-network doctors with the PPO plans but it’s recommended to visit doctors and hospitals with provided networks to avoid extra costs like higher fees and separate deductibles. With PPO in some cases, you will have to pay a doctor for some services directly, then fail a claim to get reimbursed. This is most usual when you seek services from an out-of-network provider.
A Point Of Service (POS) Plan
A POS Plan is managed care service plan that is a hybrid of an HMO and PPO Plan. This means that you need to choose your PCP like in the HMO Plan but your coverage isn’t limited to the network of the plan just like in the PPO plan. Still, you will have out-of-pocket costs if you choose to go to out-of-network doctors without a referral from your PCP. Also, these plans provide nationwide coverage and often have no deductibles for visiting a doctor within the network, but out-of-network deductibles can be very high. But, you will usually be responsible for copayments which are from $10 – $25 per doctor’s visit.
Exclusive Provider Organization Plan
An EPO plan doesn’t require you to choose a Primary Care Provider or get a referral to see a specialist like with the HMO plan. But, like with the HMO plan, you can’t go outside of a network for care rather you get an exclusive network of high-quality doctors and hospitals. If you use an out-of-network service you’ll have to pay out-of-pocket because your plan will not cover that cost. You’ll be responsible for monthly premiums, copays, and coinsurances for some medical services after you’ve met the deductible.
Medical Indemnity Plans
Unlike, managed care qualified healthcare plans, Medical Indemnity plans do need to follow the requirements of the Affordable Care Act (ACA). With those plans, you’ll get flat payments no matter which provider you use and your premiums and amount of coverage will depend on your living area.
They are also known as “fee-for-service” plans which means it allows you to choose a doctor, hospital, or health care professional on your own. It gives you the greatest amount of flexibility and freedom out of all health insurance plans because they don’t limit you to in or out-of-network doctors and there are no restrictions on whom you will seek care.
Indemnity plan coverage may not provide coverage for preventative services, such as mammograms, annual physicals, or immunizations, and there are usually healthcare questions and medical underwriting which means that everyone may not qualify to get these plans. Also, they usually cost more than managed care plans.
Types of Medical Indemnity Plans
There are two different types of Medical indemnity plans. Both plans are offering different types of coverage, and you can choose between a traditional indemnity plan and a fixed indemnity plan. But, with both plans, you can go to the hospitals and laboratories you prefer, without a referral from a PCP, but your plan may not cover every medical procedure.
Traditional Indemnity Plan
This type of plan covers surgeries, hospital stays, doctor visits, outpatient procedures, drug prescriptions, and preventive care. You can choose where you want to receive care and the percentage you pay is usually an established amount usually charged for a specific service within your geographic area.
Fixed Indemnity Plan
These indemnity plans are supplements for major medical plans, but still don’t follow the ACA requirements even though they help with covering out-of-pocket costs that primary insurance doesn’t cover. With a fixed indemnity plan you can get additional coverage benefits such as accident fixed indemnity, critical illness coverage, and hospital sickness coverage.