Private health insurance is a type of medical insurance in which an individual pays the insurer a fixed fee in exchange for coverage of all or most health care expenses.
This type of insurance may be used to pay for the services of a doctor, hospitalization, surgery, diagnostic tests, prescription drugs and other things. A private insurer usually does not make payments directly to providers but instead compensates them through agreements with various healthcare organizations such as hospitals and physicians.
Different types of private health insurance plan
Health Maintenance Organisation (HMO):
This health insurance plan works on the principle of pre-negotiating contracts with hospitals and doctors. These contracts help the patient to secure cost-effective care for various medical needs.
The patient needs to choose an HMO plan from a list of available plans and enjoy benefits such as lower co-payments, affordable premiums, and better coverage for specific medical needs.
Preferred Provider Organization (PPO):
PPO plans are sometimes more expensive than traditional health insurance, but they generally offer more coverage.
A PPO is a health insurance plan that charges its members an annual fee in exchange for not paying for medical services out of pocket. A PPO will cover some or all out-of-pocket costs, like deductibles and coinsurance, while the insured party pays the rest of the cost.
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Exclusive Provider Organization (EPO):
This health insurance work like this: When you first sign up with EPO, you pay a monthly premium, and in return, the company pays your medical bills. This is called “network coverage” because only doctors and hospitals that belong to the network will be covered. If you go to a doctor who is not part of the network, you have to pay out-of-pocket for their services.
This type of insurance plan was created for people who want more control over their healthcare decisions and who don’t want to deal with high deductibles and copays on behalf of their employer or the government. EPO’s are also attractive because they can come with low monthly payment plans and no waiting periods before coverage begins.
Catastrophic Plan:
Catastrophic plans are also known as high-deductible health coverage.
These are usually less expensive than other types of health insurance. They provide less coverage than traditional plans, but they are still eligible for tax credits. This type of plan will cover all out-of-pocket costs up to a certain amount, usually around $6,000 per year.
Some people choose these plans because they have low premiums and open enrollment periods.
Another reason for this type of plan is that you can take advantage of an HSA account to cover healthcare costs beyond the deductible if you have one available.
High-Deductible Health Plan With or Without a Health Savings Account:
A high deductible health plan with or without a health savings account is a type of private health insurance plan with an annual deductible of more than $1,350 for self-only coverage or $2,700 for family coverage under the Affordable Care Act.
So these are the most common types of private health insurance plans that you should be well aware of.
