Open Enrollment Begins: What to Know About Different Types of Health Insurance

The federal Affordable Care Act exchange is reopening on Feb 15, 2021, per the Executive Order President Biden signed shortly after taking office.

According to the U.S. Department of Health and Human Services (HHS), between February 15, 2021, and May 15, 2021, uninsured Americans will be granted access to marketplace coverage. The reopening of the health insurance exchanges for this period has the potential to benefit approximately 15 million uninsured individuals.

This Special Enrollment Period (SEP) will allow consumers to apply for new health insurance coverage or update an existing application. Individuals making less than $51,000, and families of four making up to $104,800 may be eligible for subsidies.

For residents of most states, access to this Special Enrollment Period will be available through www.healthcare.gov. It is expected that most states that do not use the federal exchange, will follow suit, with their own SEP.

Whether you get your health insurance through your job, Medicare, or one of the Affordable Care Act exchanges, wading through the mix of plans can be confusing. It’s an alphabet soup of abbreviations—HMO, PPO, POS, EPO, HDHP—and it may seem like you need a Ph.D. to understand the different types of health insurance.

Here’s what to know about six different types of health insurance plans you may select during the Special Enrollment Period.

What is a health maintenance organization (HMO)?

A health maintenance organization (HMO) is a type of health insurance structure that provides health coverage through a network of pre-approved health care professionals, specialists, and facilities. In other words, HMOs limit coverage to doctors, hospitals, health care providers, and other medical facilities that contract with the HMO. With few exceptions, such as emergencies, HMO health coverage won’t pay for your care if you use a health care provider who is not contracted with the HMO.

Is an HMO health insurance plan right for me?

An HMO might be a good choice if you’re relatively healthy and tend to stay close to home, reducing the likelihood you’d need out-of-network medical care. HMOs, are generally less expensive than PPO insurance plans in both deductibles and premiums. However, you’ll be restricted to using in-network health care providers, or risk not having your medical care covered.

What is a preferred provider organization (PPO)?

A preferred provider organization (PPO) is a type of health insurance structure that provides health coverage through a network of preferred providers. These health care providers (physicians, hospitals, specialists, and other health care professionals) have agreed to provide patients with service at an agreed-upon rate. Individuals who have PPO insurance can see any provider within large networks of preferred providers. Like HMO plans, you will pay more if you choose to see a healthcare provider who is not in the plan.

Is a PPO health insurance plan right for me?

A PPO plan is generally more expensive than an HMO. But you’ll have access to more health care providers, facilities, and specialists. PPOs may be in your best interest if you have health conditions that require more than basic medical care and annual immunizations. They often provide more comprehensive coverage, although you’ll likely have to meet a deductible first. PPO plans are typically attractive to individuals with chronic conditions such as arthritis or Type 2 diabetes, who like being able to see specialists without waiting for a referral.

What is point of service (POS) health insurance?

Point of service health insurance is roughly a cross between an HMO and PPO. You can see health care providers who are out of your network, but you’ll pay much less if you use doctors, hospitals, and other health care providers who belong to the network. You will need a referral from your primary care physician to see a specialist.

Is a POS health insurance plan right for me?

If your current physician is in the POS network, but you would like the option of being able to use out of network hospitals, specialists, and health care providers, you might like a POS plan. If you don’t need specialists, you may not take advantage of the full benefits of a POS health insurance plan.

What is an exclusive provider organization (EPO)?

An Exclusive Provider Organization (EPO) only provides coverage if you use a physician, specialist, or hospital in the plan. If you want to see a provider, specialist, or use a hospital out of the network, you will absorb the cost. EPOs also do not require that you have a Primary Care Physician (PCP).

Is an EPO health insurance plan right for me?

EPOs can be the most affordable health insurance option, but you will be very limited in your choice of health care providers, and medical facilities, such as hospitals. However, you won’t need a referral to see an in-network specialist, which can reduce wait times.

What is catastrophic health insurance?

Catastrophic plans are designed for those under the age of 30, or those who qualify for a hardship exemption (homelessness, a victim of natural disaster, eviction, etc.). Catastrophic plans are often the cheapest insurance plans available and will cover preventative services, immunizations, and three visits to a primary care physician each year.

Is a catastrophic health insurance plan right for me?

Catastrophic health insurance plans are designed to protect you from excessive medical bills in the event of an emergency. Because they are very limited in their coverage, and you will need to meet a high deductible before coverage for services beyond basic preventative care will kick in, these plans are best for young, very healthy people.

What is a high deductible health plan (HDHP)?

An HDHP offers a low monthly premium, but a higher deductible than a catastrophic health plan. You can combine an HDHP with a health savings account (HSA), which allows you to pay for certain medical expenses like your deductible and copays with pretax money. As a result, you’ll end up spending less. Preventative care is free, but if you do get sick, you’ll spend a lot of out-of-pocket money for your treatment.

Is an HDHP health insurance plan right for me?

If you’re healthy, rarely have needs beyond basic preventative care, and are comfortable paying out-of-pocket if you happen to get very sick, you might like an HDHP. It may save you a great deal of money, as long as you remain healthy. However, this plan is generally not favored by those with chronic health conditions.

Choosing Insurance During Open Enrollment

No matter what type of insurance you have, or decide to switch to, during open enrollment or a Special Enrollment Period, you always have the option to save money on your medications, by checking RxSaver.

RxSaver is a free prescription drug coupon platform that offers up to 80% off prescription drug prices. You can use RxSaver in place of your insurance if your copay is more than the coupon price. You can also use RxSaver drug coupons if you don’t have health insurance coverage.