Why you need health coverage

Health Coverage Policies (or Health Insurance Plans) vary greatly depending on what type of category the particular falls under. There are four main types of insurance and one of the categories contains three subcategories itself. The types are as follows: Individual or Self-Insurance; Indemnity plans or fee-for-service plans; and finally Managed care with its subcategories being Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), and Point of Service (POS). The categories seem simple enough but choosing the best for your particular needs can sometimes prove to be difficult.

Knowing what each of the Health Coverage Policies consists of can make your decision that much easier. We'll start with the most recognizable of the four: Managed Care. An HMO strictly governs who you can see in non-emergency situations if they are not in-network (authorized providers), where as with a PPO you can choose to see anyone (at a higher cost for those not in-network). Both have lower premiums, co-pays and control over what services are provided and when. Fee-for-Service Health Coverage Policies offer the most freedom to choose your doctor but come with high out-of-pocket costs and premiums. With POS policies, you have to choose a Primary Care Physician (PCP) and a referral from the PCP is required to avoid extra costs.

The type of Health Coverage Policy that is right for you will depend on your health issues, family size and budget. Before deciding on a policy, it is important to determine what your exact needs are and what type of policy will fill those needs.