Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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Private health insurance pays for nursing care

Private health insurance is insurance that is not purchased through a group health plan via an employer. Private health insurance can’t necessarily be categorized as one thing, however, as there are dozens of different types of health insurance policies with different coverage types to choose from.

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Understanding the different types of policies and what your options are in terms of coverage amounts is important for making the right decision about your health insurance. Keep reading to learn more about the most common types of coverage options and how to save money on your health insurance as well.

Network Plans

As you can imagine, there are many different types of health insurance options to choose from if you decide to purchase private health insurance. These days, the policies that sell the most are HMOs and PPOs.

An HMO (Health Maintenance Organization) offers you the most affordable option when it comes to choosing health insurance. Traditionally associated with group health plans because the cost was lower for employers, you can also purchase an HMO as a private buyer. HMOs tend to be very restrictive, which is why they are so inexpensive.

You have a primary care physician that you have to choose from a network. If you are unhappy with your doctor, you cannot see another doctor without permission from your HMO. In addition, your primary care physician and your HMO have to approve any visits to specialists. You can be turned down if your HMO doesn’t deem it a necessary visit.

These same restrictions are the reason that HMOs are so affordable. By restricting the amount of doctors you can see, the HMO limits costs as these doctors agree to a specific price for each service. In addition, by working within a network with specific parameters, the insurance company will receive the same paperwork from every office, there is no deviating from the plan. Doctors are also less likely to run unnecessary tests because the HMO will not pay for any tests they don’t see as necessary.

A PPO (Preferred Provider Organization) is still an affordable option; however, it is more expensive than an HMO. PPOs are far less restrictive, allowing you to see any doctor in their network whenever you need to. This includes switching doctors and seeing a specialist if you feel the need. You can even see doctors out side of the network for a higher fee.

While the PPO is more expensive than an HMO, there are more out of pocket costs with a PPO as well. Traditionally HMOs don’t have deductibles, although you will find a few insurance companies that offer this as a choice now to reduce premiums even further, but PPOs always have a deductible. This means that you will spend more out of pocket before you insurance company starts paying for your medical bills.

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Non Network Plans

If you want complete freedom of choice, no networks, see whatever doctor you want wherever you happen to be, then an Indemnity plan is for you. Sometimes simply called traditional insurance, an indemnity plan offers you complete freedom. Your doctor can schedule any tests or procedures that he or she deems necessary without getting opposition from the insurance company.

The catch is that you are going to pay very large premiums for this type of coverage. In addition, unless you have significant cash on hand, you will have to include a deductible because the costs without one could equal a couple thousand dollars a month.

You can, however, decrease costs by choosing a high deductible option. There are several levels of indemnity plans. Several insurance companies even offer $10,000 or more deductibles to help you manage your premiums. This option is ideal for very healthy individuals that don’t a situation where they would need to spend a lot of time in a hospital.

If you do have to spend a lot of time in the hospital, for example for an extreme illness, then a $10,000 deductible may seem like nothing compared to the final hospital bill, so there is a trade off here. The downside is, if you break an arm, for example, and are taken to the emergency room, then you are going to have to pay that $3,000 bill out of pocket.

There are, of course, other types of coverage as well, such as hospital only coverage, long-term care only coverage, coverage that only covers doctors visits and so on. You will have to assess you needs to determine what type of coverage is right for you.

Saving Money on Your Health Insurance

Now that you understand at least the basics about your healthcare options, you need to understand the different ways that you can save money on those plans. We already mentioned that a higher deductible will reduce your health insurance rates, but there are other ways to reduce your premiums as well.

One way is to increase your out of pocket expenses. For example, if you have an 80/20 plan, meaning that your insurance company pays 80% of your medical costs while you pay 20%, you can reduce your premiums by changing that to 70/30. In addition, increasing your copay will also reduce your premiums, although this will not be as effective as higher deductibles or lower percentage of care coverage.

Another way to decrease your premiums is by reducing the amount of coverage that you get. You can choose to exclude certain events (although this isn’t really recommended) or you can put a cap on the amount of coverage you can receive for an event. For example, you can choose a max $20,000 coverage for heart failure. Again, this isn’t really recommended, but if you need health insurance and you can’t afford premiums, this is a way to cut corners.

You can also choose to reduce your annual maximum dollar benefits and lifetime maximum dollar benefit. What this means is that you could agree to the insurance company not paying more than $50,000 annual for medical care and no more than $1,000,000 in your lifetime; these are just examples, there are many different variables.

Lastly, in order to get the very best rates for your private health insurance, you need to ensure that you compare rates between companies before you buy. Every insurance company is vying for your business, especially in this tough economy where more and more people are foregoing this important insurance. This means that prices are better than they have been in a long time. If you don’t compare, however, you won’t be able to tell if you are getting the best rate.

Using our free quote tool is a fast and easy way to compare different insurance companies. The information is displayed for you side by side so that you can see what you need without switching from one page to another. In addition, the process is anonymous, the insurance companies don’t see your name, address or email, they only get the information pertinent to giving you a quote.

You deserve to get the best rate, and we can help you find it. Give it a try, you don’t have to buy and you can learn right now how much money you could be saving on your health insurance premiums.

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