Health insurance protects you from catastrophic medical costs while providing access to preventive care. Understanding plan types and key terms helps you choose coverage that balances cost with your healthcare needs.
Health Insurance Plan Types
HMO (Health Maintenance Organization)
- Must choose primary care physician (PCP)
- Referrals required for specialists
- Care must be in-network (except emergencies)
- Generally lower premiums
- Less flexibility in provider choice
Best for: Those comfortable with restricted networks who want lower costs.
PPO (Preferred Provider Organization)
- No PCP or referral requirements
- Can see any provider (higher cost out-of-network)
- More flexibility in care choices
- Higher premiums than HMOs
- Out-of-network coverage available
Best for: Those wanting flexibility to see specialists directly.
EPO (Exclusive Provider Organization)
- No referrals needed for specialists
- Must stay in-network (no out-of-network coverage)
- Hybrid between HMO and PPO
- Moderate premiums
Best for: Those wanting specialist access without referrals but okay with network restrictions.
HDHP (High Deductible Health Plan)
- Lower premiums, higher deductibles
- HSA-compatible for tax advantages
- Must meet minimum deductible requirements
- Best paired with health savings account
Best for: Healthy individuals who want lower premiums and HSA tax benefits.
Understanding Health Insurance Costs
Premium
Monthly payment for coverage, paid whether or not you use healthcare services.
Deductible
Amount you pay before insurance starts covering costs. Higher deductibles = lower premiums.
Copay
Fixed amount for specific services ($25 for doctor visit, $10 for generic drugs).
Coinsurance
Percentage you pay after deductible (e.g., 20% of hospital costs).
Out-of-Pocket Maximum
Most you'll pay in a year. After reaching this, insurance pays 100%.
Metal Tier Plans (Marketplace)
| Tier | Coverage | Best For |
|---|---|---|
| Bronze | 60% covered | Healthy, low usage |
| Silver | 70% covered | Moderate usage |
| Gold | 80% covered | Regular healthcare needs |
| Platinum | 90% covered | Frequent medical care |
Where to Get Health Insurance
Employer Coverage
- Often most affordable option
- Employer pays portion of premium
- Pre-tax premium payments
- Group rates typically better
Healthcare.gov Marketplace
- For self-employed or no employer coverage
- Subsidies based on income
- Open enrollment (Nov-Jan) or special enrollment
- Required coverage of essential benefits
Medicare (65+)
- Government program for seniors
- Part A (hospital), Part B (medical), Part D (drugs)
- Supplement with Medigap or Medicare Advantage
Medicaid
- For low-income individuals and families
- Eligibility varies by state
- Often no or minimal costs
HSA: Health Savings Account
Triple tax advantage with HDHP plans:
- Contributions are tax-deductible
- Grows tax-free
- Withdrawals for medical expenses tax-free
- Funds roll over year to year
- 2024 limits: $4,150 individual, $8,300 family
HSAs work well with budgeting strategies for healthcare costs.
How to Choose a Health Plan
- Estimate your healthcare usage for the year
- List your current doctors and medications
- Check which doctors are in-network for each plan
- Calculate total potential costs (premium + deductible + copays)
- Consider worst-case scenario costs
- Factor in HSA benefits if applicable
What to Do If You're Uninsured
- Check Marketplace for subsidies
- Review Medicaid eligibility
- Consider short-term health insurance
- Look into health sharing ministries
- Community health centers for care
