What Are the Different Types of Health Insurance? 

You can choose from various types of health insurance. Learn more about the different types below.

Health Maintenance Organization (HMO)

HMOs offer a list of participating doctors from a specified list. These types of health insurance plans also require you to choose a primary care provider (PCP) from the network. You must coordinate all your care through your PCP and must refer you to any in-network specialists. HMO plans typically cost less than other types of health plans (as long as you stay in the specified network). 

Exclusive Provider Organization (EPO)

EPOs also offer a list of participating providers but do not include out-of-network care except in the case of an emergency. In other words, if you choose a provider or facility outside the plan’s local network, you pay the full cost of services yourself.

If you want to see a specialist in your network, you don’t need a referral from a PCP.

Preferred Provider Organization (PPO)

PPOs typically offer you a large network of participating providers. You may also choose to see providers from outside of the plan’s network, but you will pay more in out-of-pocket costs.

You don’t have to choose a PCP and can choose specialists without a referral. 

Point of Service Plan (POS)

Point of service plans combine parts of HMO and PPO plans. You don’t get quite as large of a network as a PPO plan and the costs for in-network care cost less, just like an HMO. You must choose a primary care provider (PCP) from within the plan network of primary care professionals and must get a referral. 

What Are the Key Features of Health Insurance Policies?

Take a look at some key features of health insurance policies so you can make the right decision for you and your family’s needs.

Premium

You pay a premium to a health insurance company to have an active insurance plan. Most people pay a premium every month, but you also might pay once a quarter or once a year.

If you get health insurance through work, your employer probably covers a share of your monthly premium.

Deductible

You pay a specific amount each year, or a deductible, before your insurance company pays its share. For example, let’s say you have a $1,000 deductible. This means your insurance company might not chip in any money until you pay $1,000 for health care during the year. 

Copayment

The copayment (copay) represents the amount you owe each time you receive medical care. You may pay various amounts for your regular physician and more when you go to a specialist.

Normally, you can’t use your copays to reach your deductible. 

Coinsurance

Coinsurance represents the percentage you’ll pay for medical expenses. Let’s say you meet your deductible early in the year. From then on, your coinsurance would cost you 20%.

Out-of-Pocket Maximum

The out-of-pocket maximum totals the most you’ll pay each year toward costs, including your deductible, copay and coinsurance. For the 2021 plan year, the out-of-pocket limit for a Marketplace plan can’t be more than $8,550 for an individual and $17,100 for a family. 

Let’s say you’ve gone all year without any medical expenses and suddenly have to go to the hospital. Let’s also say your plan specifies that you pay 30% of hospital bills (your coinsurance) and your insurance company pays 70%. If your 30% share of your bill is greater than $8,550, you still won’t have to pay more than that because you will have met your yearly out-of-pocket maximum.

How Do You Know Whether You Need a Different Health Insurance Plan? 

How do you know if you need a different insurance plan?

1. Your deductible is higher than the amount in your savings account.

Almost all major medical plans have high annual deductibles that are now $1,000 or more and include over $6,500 in out-of-pocket expense limits.

However, many Americans can’t cover that amount of money. A study showed that four in 10 Americans wouldn’t have enough money in savings to cover an unexpected $1,000 medical event.

You may need to shop around for the lowest deductible you can find and make sure that you can pay your premium every month.

2. You want access to a wide choice of providers.

Let’s say you live in a state that doesn’t offer you access to coverage out of state. For example, let’s say you live in Iowa but develop a serious medical condition and want to get treated at the Mayo Clinic in Minnesota. 

Many HMO plans only offer local physician network coverage, but a PPO often offers a larger network of out-of-state providers. However, you likely will need to pay a larger copay or coinsurance amount for out-of-network coverage.

3. You want to pay less for health insurance.

Take a look at a few ways you can pay less for health insurance: 

  • Stop smoking.
  • Increase your deductible.
  • Change your coinsurance ratio.
  • Get a high-deductible health plan with an HSA (Health Savings Account).
  • Choose an in-network doctor.
  • Change group health insurance plans.
  • Encourage your employer to choose a cheaper health insurance plan.

Ksenia Yudina, CFA, MBA

Founder and CEO

Ksenia is the Founder and CEO of U-Nest, the first mobile app that makes it easy for families to save for college. As an entrepreneur and finance professional, Ksenia has focused on alleviating the impact of student debt on families across the economic spectrum. Previously, Ksenia was a Vice President atCapital Group/American Funds, the largest 529 provider in the U.S. In this role, she played a leadership role in helping parents plan and manage their finances, with a focus on the future well-being of their children. Prior to Capital Group/American Funds, she was founder of a residential real estate company. Ksenia earned her bachelor’s degree in finance from CaliforniaState University Northridge, and an MBA from UCLA’s Anderson School of Management.

Mike Van Kempen

Chief Operating Officer

Mike joined U-Nest in September 2019 as COO. He was previously at Acorns, a financial wellness platform, where he spearheaded the analytics and growth initiatives. Mike successfully expandedAcorns’ paid acquisition strategy, adding over 4.5 million investment accounts. Mike began his career in strategy & analytics at Belly, a Chicago-based loyalty startup in 2012. At Belly, Mike led projects that fueled growth across all aspects of the business, growing the customer base from1,000 to over 11,000 merchants, and accumulating a membership of over 2 million customers.Mike holds a B.B.A. in Finance from Loyola University of Chicago.

Steve Buchanan

Chief Technology Officer

Steve has over 20 years of experience in delivering digital innovations in the financial sector. Steve previously orchestrated product architecture and innovation as a Solutions Architect/ Fintech consultant at Union Bank. Prior to Union Bank, he was Chief Architect and Director of Engineering at Calypso, a Silicon Valley startup, where he architected and built multiple financial solutions. He was also Head of Global Integrations at Globe One in Vietnam where he integrated its Peer-to-Peer lending products into core banking solutions. Steve also built the first ever electronic Equities &Equity Options trading systems for Scottish stock brokers Wood Mackenzie (acquired by CountyNatWest). He is a graduate of Edinburgh University.

Peter Mansfield

Chief Marketing Officer

Peter has built an impressive track record in multiple financial industry segments including payments, credit/prepaid cards and lending. He has played an instrumental role at a succession of financial industry leaders, co-founding companies such as Brand3 (acquired by American Express) and PropertyBridge (acquired by Moneygram), and, as the early stage marketing lead at Marqeta (where he was team member number two), BillFloat and WallabyFinancial (acquired by Bankrate).He has helped fast-growth companies reach an aggregate market value of close to $8 billion. Peter holds a bachelor’s degree in economics from the University of Angila, UK.

Sonya Kidman

Client Relationship Manager

Sonya Kidman is a Customer Success professional with a decade of experience in advocating for consumer through user research and genuine empathy. Sonya specializes in user behavior and regularly attends national and global training sessions in wellness and people analytics tools. Sonya is a true global citizen was born in Russia, grew up in Israel, lived and worked in Canada and NewZealand. That global expertise along with an undergraduate degree in Sociology from Tel AvivUniversity have helped to shape a bullet-prof Sonya's framework to develop a winning customer strategy.

Frank Mastrangelo

Board Member

One part banker and one part technologist, Frank spent his early days with the Annenberg Foundation and PNC Bank. His career path led him to Jefferson Bank, where he led the build-out of its electronic banking platforms, and where he would forge a powerful alliance with The Bancorp co-founder Betsy Z. Cohen. As President and COO of The Bancorp from its inception in 1999 Frank played a critical role in helping the organization become an industry bellwether for branchless financial services and a global leader in payments. For this, he has become a widely respected fintech expert, and thought-leader. Frank was recognized in 2013 by Banking Innovation, a leading industry journal, as an “Innovator to Watch.” and as one of the innovators shaping the future of banking. Frank is a graduate of West Chester University of Pennsylvania.

Disclosure

College Savings Calculator is a hypothetical tool that demonstrates how monthly contributions, age-based asset rebalancing, and tax savings may impact the long-term value of your account, and do not take into account a portfolio’s underlying investment management fees. Calculations assume the private institution cost inflation is 2.8%, public out of state cost inflation is 3.9%, public in state cost inflation is 2.7%. Portfolio is assumed to have only stocks and bonds. Monthly equity returns are based on the historical data from the 10-year track record of the stock market (SPY). Monthly fixed income returns are based on the historical data from the 10-year track record of the bond market index (AGG). The current college expenses are provided by the collegeboard.org. Actual account performance may differ due to market fluctuations, changes in recurring investments, and asset allocation. The information provided here is for illustrative purposes only and does not represent actual or future performance of any investment option and is not intended to predict or project the investment performance of any security or index.