Four basic plan health insurance plan types

As you're looking for the right health insurance, a good step is to figure out which plan type you need. Each plan type balances your costs and risks differently. Think about your health care use and budget to find the one that fits.

High-deductible, or HSA-compatible plans

A Health Savings Account (HSA) helps you set aside money for medical expenses. High-deductible plans are set up to help you make the most of an HSA. Here's how they work:

  • Use the money in your HSA to make tax-free payments for approved medical and dental costs.
  • You pay 100 percent of costs until you've met your deductible. One important exception: Your plan pays for all preventive care.
  • You'll have some costs after you meet your deductible. Co-insurance may apply. This means you pay percentage of costs.
  • You'll have an out-of-pocket limit. Once you've reached this limit in payments, the plan will pay 100 percent of costs.

Co-insurance-only plans

Co-insurance-only plans are similar to HSA-compatible plans, but with one key difference. You can't pair them with an HSA because they don't meet the cost-sharing requirements set for high-deductible plans. Here's how they work:
  • You pay 100 percent of costs until you've met your deductible. One important exception: Your plan pays for all preventive care.
  • You'll have co-insurance costs after you've met your deductible. This means you pay percentage of costs.
  • You'll have an out-of-pocket limit. Once you've reached this limit in payments, the plan will pay 100 percent of costs.

 
Copay plans

In this type of plan, you'll pay copay, or a flat fee, for some services. Here's how a copay plan works:
  • Your policy spells out which services have copays and which don't.
  • You pay 100 percent of costs for services without a copay until you've met your deductible. One important exception: Your plan pays for all preventive care.
  • You'll have some costs after you meet your deductible. Copays and co-insurance may apply. Co-insurance means you pay a percentage of costs.
  • You'll have an out-of-pocket limit. Once you've reached this limit in payments, the plan will pay 100 percent of costs.
  • You can't use an HSA to pay costs.

 
Catastrophic plans

These plans have low premiums but high deductibles. They protect you from the costs of a major illness or injury. Here's how they work:
  • You pay a copay for the first three primary care office visits.
  • You pay 100 percent of costs for other services until you've met your deductible. One important exception: Your plan pays for all preventive care.
  • To buy a catastrophic plan, you must be under age 30. You may get an exemption from the health insurance marketplace that serves your state. Find more on hardship exemptions at HealthCare.gov.
  • You can't use an HSA to pay costs.

 

 

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