Private Health Insurance

Health insurers offer different types of plans. Make sure to understand the most common ones well before choosing the one that's right for you.

✓ Health Maintenance Organization (HMO)

With this plan type, you must use a specific network of doctors and hospitals and will not get coverage for out-of-network care. You must choose a primary care physician (PCP), and have less flexibility in choosing providers. To see a specialist, you need a referral.

✓ Preferred Provider Organization (PPO)

With this plan type, you are encouraged to stay in network and receive preferable rates for seeing a care provider that is in network. You will still get some coverage for out-of-network care, however it is more expensive and the process is more difficult. To see a specialist, you do not need a referral from a primary care physician (PCP).

✓ Exclusive Provider Organization (EPO)

With this plan type, you are covered for in network care. Depending on the region, the network may be smaller. Approved out-of-network emergencies are covered but all other out-of-network care is not covered and you must pay the full price. To see a specialist, you do not need a referral from a primary care physician (PCP).

✓ Point of Service (POS)

With this plan type, you can use both in network and out-of-network service providers, however you will pay a lot more when going outside the network. You would have to choose your primary care physician (PCP) from within the network. To see a specialist, you need a referral.

✓ High deductible health plans (HDHPs)

With this plan type, you pay a lower premium but your out-of-pocket expense is much higher.

Beyond the standard health insurance plan types, several alternative options and supplementary accounts can help with healthcare costs or provide different approaches to coverage.

✓ Indemnity Plans

Also called fee-for-service plans, these traditional insurance plans allow you to see any doctor or hospital. You typically pay upfront and then get reimbursed by the insurance company. While offering maximum flexibility in choosing providers, they usually have higher costs and require more paperwork than managed care plans.

✓ Catastrophic Health Plans

Available primarily to people under 30 or those with hardship exemptions, these plans have very low monthly premiums but extremely high deductibles. They cover essential health benefits and three primary care visits per year before the deductible, but are designed mainly to protect against major medical expenses rather than routine care.

✓ Health Savings Accounts (HSAs)

Available only with high-deductible health plans (HDHPs), HSAs allow you to contribute pre-tax money for qualified medical expenses. For 2025, contribution limits are $4,300 for individuals and $8,550 for families, with an additional $1,000 catch-up contribution for those 55+. Funds roll over year to year, earn interest, and can be invested. After age 65, you can withdraw funds for any purpose (with income tax but no penalty).

✓ Health Sharing Plans

These are not insurance but cooperative arrangements where members share each other's medical expenses, often with religious or ethical guidelines. Monthly costs are typically lower than traditional insurance, but there's no guarantee that expenses will be covered. Members usually pay providers directly and then submit bills for potential sharing. These plans are exempt from many ACA requirements.

Marketplace plans are put into 4 categories (or "metal levels"): Bronze, Silver, Gold, and Platinum.* Health plan categories define the percentage you will pay versus the percentage your insurer will pay for covered health services.

* Catastrophic plans are a 5th category available to people under 30 and some people with limited incomes.

Bronze
Plan pays: 60% | You pay: 40% | Deductibles: High

Silver
Plan pays: 70% | You pay: 30% | Deductibles: Moderate

Silver (with extra savings)
Plan pays: 73-96% | You pay: 6-27% | Deductibles: Low

Gold
Plan pays: 80% | You pay: 20% | Deductibles: Low

Platinum
Plan pays: 90% | You pay: 10% | Deductibles: Low

Understanding the various costs associated with health insurance is crucial for making informed decisions about your coverage.

✓ Premium

This is the monthly amount you pay for your health insurance plan, regardless of whether you use healthcare services or not.

✓ Deductible

The amount you must pay out-of-pocket for covered healthcare services before your insurance plan starts to pay.

✓ Copayment (Copay)

A fixed amount you pay for a covered healthcare service, usually when you receive the service.

✓ Coinsurance

Your share of the costs of a covered healthcare service, calculated as a percentage of the allowed amount for the service.

✓ Out-of-Pocket Maximum

The most you have to pay for covered services in a plan year. After you spend this amount on deductibles, copayments, and coinsurance, your health plan pays 100% of the costs of covered benefits.

Most people buying individual health insurance qualify for financial assistance. About 93% of marketplace enrollees receive some form of subsidy, making coverage much more affordable than the sticker price suggests.

✓ Premium Tax Credits (Premium Subsidies)

The primary form of help reduces your monthly insurance premiums based on income. Available to households earning between 100% and 400%+ of the Federal Poverty Level ($15,060-$60,240+ for individuals in 2025). You can receive credits in advance to lower monthly payments, or claim them when filing taxes.

✓ Enhanced Premium Tax Credits (Through 2025)

Temporarily expanded credits make coverage even more affordable through 2025. People with incomes up to 150% of poverty level ($22,590 for individuals) pay $0 in premiums for benchmark Silver plans. Those earning above 400% of poverty level pay no more than 8.5% of household income.

✓ Cost-Sharing Reductions (CSRs)

Available only with Silver plans for people earning 100-250% of poverty level ($15,060-$37,650 for individuals in 2025). These reduce your deductibles, copays, and out-of-pocket maximums when you receive care.

Understanding when you can enroll in health insurance is crucial, as there are specific time windows when coverage is available. Missing these periods can leave you without coverage or facing penalties.

✓ Open Enrollment Period

The main enrollment window runs from November 1 through January 15 each year for Marketplace plans. During this time, anyone can sign up for, change, or cancel their health insurance plan. You must select a plan by December 15 for coverage starting January 1, or by January 15 for coverage starting February 1.

✓ Special Enrollment Periods (SEPs)

If you experience certain qualifying life events, you can enroll outside of open enrollment. You typically have 60 days from the qualifying event to enroll. Common qualifying events include losing job-based coverage, getting married or divorced, having a baby or adopting a child, moving to a new coverage area, gaining citizenship, or losing other qualifying coverage.

✓ Low-Income Special Enrollment

Individuals and families with household incomes below certain thresholds may qualify for year-round enrollment. This typically applies to those eligible for Medicaid or with incomes below 150% of the Federal Poverty Level.

✓ Medicare Enrollment Periods

Medicare has its own enrollment periods. The Initial Enrollment Period lasts seven months, starting three months before you turn 65 and ending three months after. Medicare's Annual Open Enrollment runs from October 15 to December 7.

Before purchasing health insurance, it's crucial to understand exactly what services and providers are covered. Here's how to research coverage thoroughly before making your decision.

✓ Summary of Benefits and Coverage (SBC)

Every health insurance plan must provide a standardized 4-page Summary of Benefits and Coverage document. This is your most important research tool, as all SBCs use the same format, making it easy to compare plans side-by-side.

✓ Plan Documents and Directories

Request the complete plan brochure, provider directory, and covered drug list (formulary) for each plan you're considering. These documents provide detailed information beyond what's in the SBC summary.

✓ Verify Provider Networks

Use the plan's online provider directory to confirm your preferred doctors, specialists, and hospitals are in-network. Remember that even if a hospital is in-network, individual doctors practicing there might not be.

✓ Contact the Insurance Company

Before enrolling, call the plan directly to verify coverage for any specific services you need. Ask about pre-authorization requirements, referral policies, and estimated costs for procedures you anticipate needing.

Understanding how health insurance networks operate is crucial for managing your healthcare costs and accessing the care you need. Networks are the foundation of how modern health insurance plans control costs and coordinate care.

✓ What Are Provider Networks?

A provider network is a group of healthcare providers (doctors, hospitals, specialists, labs, pharmacies) that have contracted with your insurance company to provide services at negotiated rates. These providers agree to accept lower payments in exchange for a steady stream of patients referred by the insurance plan.

✓ How Networks Control Costs

Insurance companies negotiate discounted rates with network providers, often 30-60% below standard charges. For example, an MRI that costs $3,000 at full price might be negotiated down to $1,200 for network patients.

✓ Network Tiers and Reimbursement

Many plans use tiered networks where preferred providers offer the lowest costs, standard network providers have moderate costs, and out-of-network providers have the highest costs.

✓ Dynamic Network Changes

Provider networks change throughout the year as contracts are renegotiated. A doctor who is in-network today may become out-of-network next month. Always verify network status before scheduling appointments, especially for expensive procedures or specialist visits.

Selecting the right health insurance plan requires careful consideration of your healthcare needs, financial situation, and personal preferences.

✓ Assess Your Healthcare Needs

Consider your current health status, any ongoing medical conditions, prescription medications you take regularly, and anticipated healthcare needs for the coming year.

✓ Calculate Total Costs

Don't just look at monthly premiums. Calculate potential total costs including deductibles, copays, and coinsurance for your expected healthcare usage.

✓ Check Provider Networks

Ensure your preferred doctors, specialists, and hospitals are included in the plan's provider network to avoid higher out-of-network costs.

✓ Review Prescription Drug Coverage

Check if your current medications are covered and what tier they fall under in the plan's formulary, as this affects your out-of-pocket costs.

✓ Consider Special Circumstances

Think about life changes that might affect your healthcare needs, such as planning to start a family, managing a chronic condition, or approaching retirement age.

The Affordable Care Act (ACA) fundamentally transformed how health insurance treats preexisting conditions, providing crucial protections for millions of Americans with health conditions.

✓ ACA Legal Protections

Under Section 2704 of the Public Health Service Act, as amended by the ACA, health insurance companies are legally prohibited from denying coverage or charging higher premiums based on preexisting conditions. This applies to all individual and small group health insurance plans, including those sold on and off the Health Insurance Marketplaces.

✓ What Constitutes a Preexisting Condition

A preexisting condition is any health problem you had before the date that new health coverage starts. This includes chronic conditions like diabetes, heart disease, cancer, asthma, depression, and even pregnancy. Before the ACA, insurers could deny coverage or impose waiting periods for these conditions.

✓ No Medical Underwriting

ACA-compliant plans cannot use medical underwriting to determine eligibility or pricing. Insurers cannot ask about your health history, require medical exams, or access your medical records when you apply for coverage.

✓ Guaranteed Issue and Renewability

Health insurers must offer coverage to any legal resident who applies during open enrollment or qualifying special enrollment periods, regardless of health status. Additionally, insurers cannot cancel your policy if you become sick, except for non-payment of premiums or fraud.

The Health Insurance Marketplace system was established under the ACA to provide a centralized platform for individuals and families to shop for, compare, and purchase health insurance. States were given flexibility in how to implement their marketplaces, resulting in three different models across the country.

✓ Federal Marketplace (Healthcare.gov)

Thirty-three states use the federal marketplace operated by the Centers for Medicare & Medicaid Services (CMS). These states chose not to establish their own marketplace, often due to political opposition to the ACA, budget constraints, or technical concerns about building and maintaining a complex technology platform.

✓ State-Based Marketplaces (SBMs)

Sixteen states and the District of Columbia operate their own state-based marketplaces with complete control over their platforms. These include California (Covered California), New York (NY State of Health), Massachusetts (Health Connector), and others.

✓ State Partnership and Hybrid Models

Some states use hybrid approaches that combine federal and state elements. State Partnership Marketplaces allow states to handle plan management and consumer assistance while using the federal Healthcare.gov platform for enrollment.

✓ Functional Differences for Consumers

Regardless of marketplace type, all offer the same core functions: plan comparison tools, subsidy calculations, enrollment capabilities, and access to the same federal premium tax credits and cost-sharing reductions.

What Is COBRA?

COBRA, the Consolidated Omnibus Budget Reconciliation Act, is a federal law that allows individuals to continue their employer-sponsored health insurance after experiencing certain qualifying events that would normally result in loss of coverage. These events include voluntary or involuntary job loss (except for gross misconduct), reduction in work hours, divorce or legal separation from the covered employee, death of the covered employee, and a dependent child losing eligibility under the plan.

COBRA coverage applies to group health plans offered by private-sector employers with 20 or more employees, as well as state and local government health plans. It does not apply to federal government plans or certain church-related organizations. To be eligible, an individual must have been enrolled in the employer's health plan when the qualifying event occurred.

The employer or plan administrator must notify eligible individuals of their COBRA rights. Once notified, individuals have 60 days to elect COBRA continuation coverage. If elected, coverage is retroactive to the date of the qualifying event. COBRA coverage typically lasts 18 months, but it can be extended to 36 months in certain circumstances, such as disability or additional qualifying events.

Under COBRA, the individual must pay the full cost of the health insurance premium, including the share the employer used to pay, plus a 2% administrative fee. Payment must be made on time each month to maintain coverage. COBRA coverage is identical to the coverage available under the group plan before the qualifying event, including access to the same doctors, benefits, and services.