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Different Types of Health Insurance Plans

Health insurance is an important aspect of our lives. Without it, many people would find themselves in dire straits financially and unable to help their families, who also rely on health insurance benefits.

However, if you’re new to health insurance, it can be difficult to understand how a health insurance policy differs between plans. And thus, knowing your options will allow you to understand what’s best for you and your family.

In this guide, we’ll give you a quick rundown on some common types of health insurance services, but before diving straight into it, let’s understand what is meant by health insurance coverage first:

What Is Meant By Health Insurance?

wooden blocks on a diary reading   “Health Insurance”

Health insurance plans can be defined as any product or service that reimburses medical expenses, pays for a limited period of hospitalization, allows periodic assistance with day-to-day living expenses, and allows for payment for some preventative care services. In simpler words, it allows you to get the care you need at a lower cost than if you paid it out of pocket.

There are three main types of health insurance plans normally used in the US that vary in type, content, cost, and even coverage options.

So, if you’re looking to get health insurance services as soon as possible but don’t know which type is right for you and your family, this guide will walk you through the basics of what each type of plan covers and how much it’ll cost.

Let’s begin:

All You Need To Know About Health Insurance Plans

Emergency department in a hospital

The most common types of health insurance plans include:

1. Medicare

Medicare is a popular health insurance plan provided by the federal government that offers health care for people older than 65. Medicare was created under the Social Security Act of 1965 and is administered by the federal government.

Medicare coverage is available to everyone who has worked long enough and paid into the system, regardless of their health status. The program’s costs are financed through a combination of payroll taxes and general revenues.


  • Medicare Advantage Plans

The Medicare Advantage plans are much like regular Medicare except that they offer additional benefits and lower cost-sharing requirements.

It’s one of the best options for availing benefits of both Medicare Part A and B. Medicare-approved privately-owned companies can offer Medicare Advantage plans, also known as “Part C” or “MA Plans,” but are required to abide by the rules established by Medicare under all circumstances.

2. Medicaid Plans

Medicaid plans are the most common type of government-funded health insurance plan and are available to people (individuals and families) with low incomes. They provide coverage for basic medical services, such as doctor visits, dental care, and prescription medication.

Medicaid plans also cover certain medical services that aren’t covered by Medicare or other private insurance plans. These include:

  • Diagnostic and preventive care
  • Inpatient hospital care
  • Outpatient hospital care
  • Long-term care (skilled nursing facilities and residential care)

3. Private Health Insurance

This type of coverage can be purchased on your own without having to rely on your employer or government programs like Medicare or Medicaid. Private health insurance companies like Covered California Certified Agent offer a wide range of options so you must shop around before making a decision about which plan might best suit your needs.

The four most common types of private health insurance plans include:

· HMOs (preferred provider organizations)

HMOs usually limit the number of doctors or other providers that a member can see, but will charge a minimum monthly premium amount for insurance. In addition, HMOs will typically cover hospitalizations and emergency room visits as well as prescription medications so you have to deal with the least amount of paperwork.

· PPOs (preferred provider organizations)

PPOs are similar to HMOs in that they require members to see a certain number of doctors with no referral to see a specialist. However, it does offer more extensive coverage than HMOs, including maternity benefits and preventative care. Similarly, if you visit a doctor who is in-network with the PPO, there is minimal to no paperwork.

However, PPO members must pay a monthly premium and may have some deductibles and out-of-pocket costs associated with their medical expenses. Moreover, you are required to pay if you employ an out-of-network healthcare provider. After that, for the PPO plan to reimburse you, you must submit a claim.

· EPO (exclusive provider organization)

Exclusive provider organizations cover only a moderate group of doctors or hospitals in their network but you don’t get to enjoy a referral to see a specialist. EPOs are less expensive than other types of PPOs with low premium amounts and with the least amount of paperwork involved. You’ll be required to pay the full cost if you desire to meet an out-of-network healthcare provider.

· POS (point-of-service plan)

An ambulance

Point-of-service plans offer more flexibility than traditional health insurance plans because members can choose from a pool of in-network doctors or hospitals when they are needed most. They also tend to have lower monthly premiums, making them an attractive option for individuals who want control over their healthcare costs without giving up all the benefits offered by traditional health insurance plans like HMOs and PPOs. In case you choose to meet an out-of-network healthcare provider, you are responsible for paying the medical bill. You then submit a claim for reimbursing that payment to your POS plan.

Get Our Reliable Health Insurance Services in California

If you’re searching for a health insurance company to get trusted health insurance services for your family or employees, Covered California Certified Agent can help you! We offer many different types of health insurance plans, such as employee insurance, dental insurance, group insurance, and life insurance.

Reach out to us today by dialing 800-771-7653.