Understanding health insurance can be challenging, but it’s essential for ensuring that you and your employees are protected. In this guide, we’ll cover the basics: What is health insurance? How does it work? And what are the different types of health insurance available?
What Is Health Insurance?
Health insurance is a contract between you and an insurance company. In exchange for a premium, the insurance company agrees to pay a portion of your medical expenses. This can include routine check-ups, emergency care, surgeries, prescriptions, and more. Health insurance helps protect you from high, unexpected medical costs.
How Does Health Insurance Work?
Health insurance works by sharing the cost of healthcare between you and your insurer. You pay a monthly premium, and in return, your insurance covers a portion of your medical expenses. This coverage can vary depending on the type of plan you choose. Typically, you’ll also pay out-of-pocket expenses like copayments, deductibles, and coinsurance. Once you reach your deductible, your insurance begins to cover a larger share of your healthcare costs.
Types of Health Insurance
There are several types of health insurance plans, each offering different levels of coverage and flexibility:
- Health Maintenance Organization (HMO): Requires you to choose a primary care physician and get referrals for specialists. It offers lower premiums but less flexibility in choosing healthcare providers.
- Preferred Provider Organization (PPO): Offers more flexibility in choosing doctors and specialists without needing referrals, but comes with higher premiums.
- Exclusive Provider Organization (EPO): Similar to a PPO but with a more limited network of providers. You must use doctors within the network to receive coverage, except in emergencies.
- Point of Service (POS): Combines features of both HMO and PPO plans. You choose a primary care physician, but you can also see out-of-network providers at a higher cost.
Understanding the differences between these plans can help you choose the best option for your needs and budget. If you need help navigating the complexities of health insurance contact us today to learn how we can assist you in finding the right health insurance plan for your business and employees!