Sources of Coverage

The Marketplace

The Affordable Care Act (ACA) created insurance “marketplaces” that offer coverage to individuals who aren’t covered through an employer’s group plan.  Through the Marketplace, individuals and families may qualify for tax credits to help pay part of the cost of insurance.  Plans purchased through the Marketplace must meet ACA requirements including coverage for pre-existing conditions.

Types of Coverage

There are three general classifications of medical insurance plans: fee-for-service (indemnity), managed care (e.g., HMOs and PPOs), and high-deductible health plan (HDHP)

Fee for Service (Indemnity Plans)

With a basic fee-for-service (indemnity) insurance plan, either you or your health-care providers are paid a fee for each service provided to insured patients. Indemnity plans typically require the payment of premiums, deductibles, and coinsurance. Limits on certain coverage or exclusions may apply.

Managed Care

Managed-care plans provide a way to help control rising medical costs. In managed-care plans, insurance companies contract with a network of healthcare providers to provide cost-effective health care. Managed-care plans include health maintenance organizations (HMOs), preferred provider organizations (PPOs), and point-of-service (POS) plans.

Health maintenance organization.  With an HMO you normally pay a monthly premium in addition to a small copayment for a visit to a physician, who is “in the network” of the HMO.  The HMO requires each member to choose a primary-care physician from their network of doctors, and to obtain a referral before seeing a specialist.  Because HMOs contract with health-care providers, costs are typically lower than in indemnity plans.

Preferred provider organization. Like an HMO, a PPO is a managed-care organization of physicians, hospitals, clinics, and other health-care providers who contract with an insurance company to provide health care at reduced rates to individuals insured in the plan.

The insured can see any health-care provider within a preferred network of providers and pays a copayment for each visit. Although insured individuals can choose providers outside the plan without permission, patient out-of-pocket costs will be higher; for example, the initial deductible for each visit is higher and the percentage of covered costs by the insurance company will be lower. Because PPOs provide more patient flexibility than HMOs, they may cost a little more.

Point-of-service plan. A POS health-care plan is a sort of hybrid between PPO and HMO. POS plans recommend that patients choose a primary care physician from inside the network. That physician can refer patients to other physicians and specialists who are inside or outside the network. Insurance companies have a national network of approved providers, so insured individuals can receive services throughout the United States. Copays tend to be lower for a POS plan than for a PPO plan.

High-Deductible Health Plans

An HDHP provides comprehensive coverage for high-cost medical bills and is usually combined with a health-reimbursement arrangement that enables participants to build savings to pay for future medical expenses. Some HDHPs cover preventive care. However, these plans have higher annual deductibles and out-of-pocket limits than other insurance plans, often several thousand dollars.

Participants enrolled in an HDHP can open a health savings account (HSA) to save money that can be used for current and future medical expenses. There are many options to consider when opening an HAS, including tax considerations and investment options.   

Remember that the cost and availability of an individual health insurance policy can depend on factors such as age, health, and the type of insurance purchased. In addition, a physical examination may be required.

Medicare Options

Medicare is the U.S. government’s health-care insurance program for the elderly.  There are many options available to beneficiaries throughout the country, and your options will depend upon what’s offered in your specific area.  Medicare coverage comes in three basic forms:

1. Original Medicare

2. Medicare Advantage Plans

3. Medicare Supplement Plans

For details about these options, visit our Medicare Page, or contact us for a free consultation.

Affordable Care Act (ACA)

The Patient Protection and Affordable Care Act (ACA) is sometimes called “Obamacare” and it was designed to help individuals who are not covered by employer-sponsored health insurance, Medicare, Medicaid, or another government program.  ACA plans are required to include “minimum essential coverage” and cannot refuse coverage for pre-existing conditions.   If you’re 30 or older and want to enroll in a “catastrophic” plan for 2019, you must claim a hardship exemption to qualify. A catastrophic health plan offers lower-priced coverage that mainly protects you from high medical costs if you get seriously hurt or injured.