What Types of Health Insurance Are Available?

To choose an insurance plan, evaluate what your medical needs are. REDPIXEL.PL/Shutterstock

You have choices when it comes to health insurance. But these choices are contingent on coverage, any preexisting conditions, and what you can afford to pay. There are different types of plans available.

But what are the different various insurance plans? Insurance plans pay for various coverages in different amounts. Some also have specific requirements that must be met. It can sometimes be challenging to find the right type of plan.

In-Network Versus Out-of-Network Providers

Many insurance plans require consumers to see a specific set of doctors, hospitals, pharmacies, or medical service providers. Providers in this designated group or network are called in-network providers.

In-network providers have a contract with a plan to provide services at a negotiated price. Consumers typically pay less when they see an in-network provider.

With an out-of-network provider, a provider doesn’t have a contract with a health care plan. If the plan covers out-of-network, it generally costs the consumer more. The consumer is responsible for the entire bill if the plan doesn’t cover the out-of-network provider.

Most People Have PPOs

Preferred provider organization (PPO) plans are the most popular among the insured. According to the Kaiser Family Foundation (KFF), 47 percent of covered people are enrolled in PPOs (as of 2023).

A PPO encourages participants to use a preferred provider network for all medical needs. The participant can visit any provider in the network without having a primary care provider.

Most of the time, PPOs allow some out-of-network care, but this means higher costs for the participant.

This plan is right for anyone who wants to choose any provider within the network and also has out-of-network coverage. It’s also popular among those who don’t want to be referred to a specialist by their primary care provider.

High Deductible Health Plans Are Popular

Most people have a choice between a low or high-deductible health plan (HDHP). An HDHP has higher deductibles than other plans. And according to the KFF, it is the second most popular plan, with 29 percent of insured people choosing it.

Most types of plans, including PPOs, can be HDHPs. Plans must meet the IRS threshold for deductibles and out-of-pocket maximums.

The IRS 2025 HDHP limit for out-of-pocket expenses is $8,300 for an individual and $16,600 for a family. This includes deductibles, copays, and coinsurance. It doesn’t cover premiums.

Health Maintenance Organizations Limit Choices

A health maintenance organization (HMO) limits coverage to a network of health care providers. These providers agree to provide care at a reduced rate.

An HMO often requires participants to go through their primary care physician (PCP) to be referred to a specialist.

They have a restricted network, and because of this, they require participants to live or work in its service area to be eligible for coverage. An HMO doesn’t cover out-of-network care unless it’s an emergency. The KFF states that HMOs are the third most popular plan, with 13 percent of insured people participating.

Point of Service Plans Cover Out-of-Network Providers

Point-of-service (POS) plans combine the features of an HMO and a PPO. A POS plan allows the participant to choose whether to go in- or out-of-network.

Those who receive service from their primary care physician have greater coverage. If they go to an out-of-network provider, they may have lower coverage and higher out-of-pocket costs. When going out-of-network, the participant must submit a claim for reimbursement because they often have to pay the fees upfront. This can be inconvenient.

One advantage of a POS is a lower premium than a PPO. Since the participant can see out-of-network providers, it is more convenient than an HMO.

According to the KFF, 10 percent of insureds are enrolled in a POS plan.

Exclusive Provider Organization Plans Have Lower Premium

Exclusive provider organization (EPO) plans provide affordability. These plans don’t require members to choose a PCP. So, participants can see a specialist without a referral. And although there is still a deductible and coinsurance, the co-pays are low.

This is for those who don’t mind limited providers and don’t want to go to a primary physician or ask for a referral. It must be noted, however, that an EPO will not cover out-of-network, which will be completely self-pay.

Catastrophic Health Plans for the Young

Catastrophic health plans provide individuals and families with health insurance for extreme emergencies or costly events.

They have both a high deductible maximum out-of-pocket limit. That means participants will owe a great amount of money before the plan starts paying.

There are some eligibility requirements to participate in a catastrophic health plan. They are usually for those who are under 30. That’s because they typically don’t have chronic conditions.

Those who have a financial hardship or qualify for an affordability exemption may also enroll.

Health-Sharing Ministries

Faith-based health insurance, known as health-sharing ministries, is a community-driven alternative to traditional health insurance. They are offered through religious-based, nonprofit charity organizations, and people can join anytime. There is no open enrollment period.

Members contribute a monthly premium to a shared pool that covers the medical expenses of other members. Members submit medical bills, and, if approved, the funds from the pool pay for the medical expenses. They often have deductibles.

Faith-based health insurance is exempt from the Affordable Care Act, which allows it to operate at lower costs and offer more personalized options. But this insurance doesn’t guarantee payment for all medical expenses, and it limits coverage on preexisting conditions.

Some procedures that act against the group’s spiritual or religious beliefs also may not be covered.

Choose the Insurance Plan That Meets Your Needs

To choose an insurance plan, evaluate what your medical needs are. Your budget may also be a factor. Remember, the premium might be low, but you may have high co-pays or deductibles that add significantly to the expense.

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