The 4 types of health insurance plan you should know

Because not all health insurance plans are the same, and not all health insurance companies are the same, it is crucial to understand the different types of health plans that exist so you can make the right decision.

Many countries, especially developing countries like Nigeria, have an inefficient healthcare system thereby making it important to have private health insurance.

In this article, we will look at the type of health plan and most importantly, how to decide which is the best one for you.

The Most Common Type of Health Insurance Plan

Not sure which types of health insurance in Nigeria are best for you? The following is a general description of each of the types of health plans.

1. PPO (Preferred or Participating Provider Organization)

This kind of health insurance plan is a medical health care arrangement that provides a discount to insured individuals or policyholders for services that they receive from specific health care providers. This plan encourages insured individuals to use a specific network of preferred health professionals and hospitals. When using a PPO insurance plan and you seek services out of your specific network arrangement, you are bound to incur higher costs.

In a PPO insurance arrangement, health care professionals contract with insurance providers or companies to render health services to participating individuals agreed upon at a reduced price in return for the payment of a small fee. Thus, insured individuals are free to use the services of any health professional in this network, but out-of-network care will cost more.

PPO offers many advantages such as more flexibility than some other insurance plans, substantial discounts, a large network of professionals to choose from, which in turn offers greater value to the insured individuals. Participants of a PPO arrangement are allowed to visit any doctor or hospital without referrals from their primary health care physicians.

2. HMOs (Health Maintenance Organizations)

HMO is a type of health insurance plan or coverage that provides medical care via a network of doctors and other health providers that are under contract with the HMOs for a monthly or annual fee.

As a rule, you must have a primary health care physician in your HMO network who coordinates your care. This plan encourages policyholders to use a specific network of health care professionals and hospitals. However, unlike a PPO, restrictions are placed on HMO insured individuals as they cannot seek out-of-network care as the HMO won't pay for it, except in some cases of emergencies or where the HMO doesn't have an in-network provider for the health service you need. In the same vein, to see a specialist under an HMO arrangement, a referral from a primary health care doctor is required.

One advantage of HMOs is that it is a more economical choice as HMO providers are paid on a per-member basis, regardless of the number of times they see a member. You also have the convenience of having a primary health care doctor who manages your care under an HMO arrangement.

Not sure where to start? Check out RelianceHMO, leading health insurance in Nigeria.

3. POS (Point Of Service)

It is a kind of managed health care insurance that provides values and gains depending on whether you use in-network or out-of-network medical services. It is a hybrid of Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs).

POS incorporates the elements of HMO and PPO plans. For a POS, you are required to choose a primary health care doctor, and you still need the referral of your primary health care doctor before you can see a specialist; just like HMO. However, POS provides coverage for out-of-network services, even though it will cost more like in the case of PPO unless your primary health care provider made the referral to the out-of-network provider.

POS is beneficial because it combines the best features of HMOs and PPOs. The health care services of POS plans often cost lower than other policies. The coverage flexibility POS offers is another added advantage. It is really an affordable plan with out-of-network coverage.

4. EPOs (Exclusive Provider Organizations)

This is a type of managed health care insurance where you have to get your health care exclusively from health care professionals or hospitals your EPO contracts with, else your EPO won't pay, except in cases of emergencies. This healthcare network is similar to HMOs. However, EPO networks are generally larger than HMOs.

When using EPO, you do not compulsorily require a primary health care physician, though it is still advisable you have one. EPOs also do not require referrals before you can see a specialist.

EPO plans are usually more affordable than PPO plans. They also have lower rates than some other types of plans. The ability to see a specialist without a referral is another advantage of EPOs.

5. Indemnity

This is a comprehensive form of insurance plan. Some have argued that it is not an insurance plan in the real sense. Indemnity plans are also referred to as fee-for-service health insurance plans or traditional indemnity plans. It is an insurance policy where the insurance company pays a predetermined percentage of charges for given health services, while the insured pays the rest of the charges.

Indemnity allows you to direct your own health care and visit any health care professional or hospital you like, with the insurance company paying a decided portion of your total charges. Under this plan, there is no provider network. You have the freedom of choice. Your insurance company will not compulsorily order you to choose a primary health care physician and you do not need referrals before you can see a specialist.

The great level of freedom offered by indemnity health insurance plans makes it advantageous as you would want to visit any physician you choose. It also offers a greater amount of flexibility and a wide range of protective cover in a health insurance plan.

What Type of Health Insurance Is Good for Me?

Despite getting familiar with the different types of health insurance that exist, you might be confused about the choice of health insurance to make.

There is no one-size-fits-all for everybody. Each insurance type has its own characteristics, advantages, and limitations.

Your choice of health insurance will depend on many factors such as:

Age
The flexibility of health insurance
Savings
The total cost of health care
Plan and network types,
Quality of health care you seek.
Your peculiar health needs and risks.
Type of cover either by company, self, or government?

For some, it can be about the final premium outflow, while for some others, it may be about the health coverage a plan offers.

Asking questions from your employers or health insurance company, so as to help you to chart the best health care insurance based on your peculiar needs and costs, will be a good way to start.

Health insurance can play the role of keeping you healthy with preventive medicines such as checkups; as prevention, they say, is better than cure.

It can also assist in managing pre-existing conditions such as diabetes and disabilities, as most health insurers provide some management programs for these kinds of conditions.

Are you still waiting before you get your health insured?

Life is unforeseeable, safeguard it with health insurance.

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