Health insurance protects against the risk of incurring catastrophic medical, surgical, or pharmaceutical expenses and can reduce or eliminate the costs associated with routine preventive care. This coverage is provided by major carriers such as BlueCross BlueShield, Cigna, UHC and Aetna and there are also smaller carriers that offer mostly regional coverage such as Kaiser.
The most comprehensive medical coverage is provided by plans that are compliant with the Affordable Care Act (ACA). ACA compliant plans covers all preventative care with no copayment and no coinsurance. ACA plans also provide financial protection through their out-of-pocket limit. The OOP provides a set limit on the amount of money the policy holder might pay for medical services. Once the OOP limit is reached the carrier will pay all additional medical expenses through the end of the that plan year.
Medical plans come in 3 primary designs: Health Maintenance Organization (HMO), Point of Service (POS), and Preferred Provider Organizations (PPO). HMO’s tend to be the most cost efficient because they have a set network of doctors/providers that members may access and the prices for procedures have been negotiated up front. If an individual wants access to more doctors they can opt for the POS plan. This plan includes the use of an HMO doctor network but also includes out-of-network benefits which allows members to see any provider they wish but at reduced benefit coverage. The PPO plan offers members the largest, typically nationwide, network of providers usually the highest cost for that privilege.
Individuals should balance the level of coverage a plan provides with the cost associated with that coverage.
