Health insurance is needed by most everyone from college students to an individual professional and even a sole proprietor. One tough task that many people face is where to get cheap health insurance coverage. There are many types of insurance plans available with variable premium rates, depending on the state and insurer offering the plan. Getting cheap health insurance requires having knowledge of the various types of insurance plans that are available.
Group Coverage
Most people obtain health coverage from their employer's group health insurance plan. Individuals who own their own business and have at least two employees can generally obtain group health coverage. A sole proprietor can obtain a group plan that is referred to as a "group of one" plan. These groups can be in their own separate category and rated accordingly by health insurance companies. This type of coverage is cheaper than purchasing an individual health insurance policy.
COBRA
COBRA is a law called the Consolidated Omnibus Budget Reconciliation Act (see Resources). It allows individuals who have been separated from their employer to continue on their former employer's group health insurance plan. Individuals pay the full amount of the premium, which is cheaper than an individual policy. Coverage for COBRA will last for 18 months.
Health Maintenance Organization
A health maintenance organization, or HMO, is a managed care health plan that offers medical and health care at a fixed price. This type of plan is generally a cheaper option for individuals and the self-employed but comes with restrictions. An HMO is able to provide lower costs because it uses doctors and health providers that have agreed to provide care for a lower cost.
Preferred Provider Organization
A preferred provider organization, or PPO, is similar to an HMO, but the prices that are charged for care can be different. There are fewer restrictions, but the costs can increase for using doctors that are not in the plan's network. The cost of coverage can be significantly decreased by selecting a higher deductible or changing co-payment amounts.
Indemnity Policy
This type of policy is what is known as a "fee-for-service" plan. This type of plan is the most expensive of the health insurance plans that are available for individuals. This is because payment is required for services rendered, and then a claim can be submitted to the insurance company for reimbursement. One advantage of these types of plans is that they can incorporate a health savings account, or HSA, (see Resources) to pay for insurance costs.
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