What are the two main types of health insurance offered in the United States?

There are different types of Marketplace health insurance plans designed to meet different needs. Some types of plans restrict your provider choices or encourage you to get care from the plan’s network of doctors, hospitals, pharmacies, and other medical service providers. Others pay a greater share of costs for providers outside the plan’s network.

Types of Marketplace plans

Depending on how many plans are offered in your area, you may find plans of all or any of these types at each metal level – Bronze, Silver, Gold, and Platinum.

Some examples of plan types you’ll find in the Marketplace:

• Exclusive Provider Organization (EPO): A managed care plan where services are covered only if you use doctors, specialists, or hospitals in the plan’s network (except in an emergency).

• Health Maintenance Organization (HMO): A type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO. It generally won't cover out-of-network care except in an emergency. An HMO may require you to live or work in its service area to be eligible for coverage. HMOs often provide integrated care and focus on prevention and wellness.

• Point of Service (POS): A type of plan where you pay less if you use doctors, hospitals, and other health care providers that belong to the plan’s network. POS plans require you to get a referral from your primary care doctor in order to see a specialist.

• Preferred Provider Organization (PPO): A type of health plan where you pay less if you use providers in the plan’s network. You can use doctors, hospitals, and providers outside of the network without a referral for an additional cost.

Get more information on what you should know about provider networks (PDF).

Need dental coverage? Visit our Dental coverage in the Marketplace page to learn more about options available to you.

Whether you are an individual shopping for insurance for yourself and family or an owner of a small business, you have choices in your selection of health plans. Understanding the different types of health insurance plans that are available to you, can help you pick the health insurance plan the best meets your coverage needs and budget.

Major medical health plans and the metallic categories

If you are buying health insurance on the federal or state Marketplace, or from a private exchange or brokerage firm, such as eHealth, you will find that the plans offered are classified by metals: Bronze, Silver, Gold, and Platinum. 

All of these plans comply with the Affordable Care Act (commonly referred to as Obamacare) and provide coverage for the 10 essential health benefit categories and all plans have a maximum out-of-pocket limit. In 2022, the most consumers with an individual plan will have to contribute to their health care costs will be $8,700, with the limit set at $17,400 for coverage of more than one person. 

Beyond that common characteristic, each plan has its own premium and cost-sharing arrangement, which varies from one plan to another, even when several plans are offered by the same insurer. The premium is the amount you pay (typically monthly) in exchange for health insurance. Cost-sharing refers to the portion of eligible healthcare expenses the insurer pays and the portion you pay out-of-pocket. Your out-of-pocket expenses may include deductibles, coinsurance, copayments and the full cost of healthcare services not covered by the plan. 

The metallic labels of major medical plans tell you the average value of the different health insurance plans, that is what portion of expected medical cost the plan will pay across an entire population enrolled in the plan. 

• A Bronze plan will cover roughly 60% of costs; you will pay about 40%
• A Silver plan will cover roughly 70% of costs; you will pay about 30%
• A Gold plan will cover roughly 80% of costs; you will pay about 20%
• A Platinum plan will cover roughly 90% of costs; you will pay about 10%

Generally, the more coverage a plan provides, the higher its premium. To illustrate how this principle works with the metal levels, consider the average national premium by metallic health insurance (for a 40-year-old) in 2022 reported by the Kaiser Family Foundation:

Metallic Types of Health InsuranceAverage Premium CostLowest Cost Bronze Plan$329 per monthLowest Cost Silver Plan$428 per monthBenchmark (second lowest cost) Silver Plan$438 per monthLowest Cost Gold Plan$462 per monthLowest Cost Platinum Plan$709 per month**Platinum plans are rare on the Marketplace and reported separately.

Understanding how the level of coverage corresponds to premium and out-of-pocket costs gives you some basic information you can refine in deciding which plan best meets your needs. Actual premium cost will vary depending on your age, location, the number of people you include in your coverage, the insurer you select, and whether you qualify for Affordable Care Act (ACA) subsidies to reduce your costs.

Managed care: HMO, EPO, POS, PPO and other types of health insurance plans

Most major medical plans’ benefits are designed to link benefits with the use of healthcare providers who participate in the plan. Therefore, it’s a  good idea to understand the difference between a Health Maintenance Organization (HMO),Exclusive Provider Organization (EPO), Point of Service (POS) plan, and a Preferred Provider Organization (PPO).

Health Maintenance Organization (HMO) plans

HMOs are one of the most popular types of health insurance you can purchase. With this plan, an entire network of health care providers agrees to offer you its services. You have to select a primary care provider (PCP) who coordinates all of your health services and care.

HMOs usually offer coverage for most types of preventive care, including specialist visits, but specialist visits are only covered when your PCP makes a referral. Additionally, you will pay copayment fees for every non-preventive medical visit, and you may have an annual deductible. HMOs are usually best suited for individuals and families that plan to see their primary care doctor on a regular basis for check-ups and other health concerns. Since 2014, the popularity of HMO plans has increased significantly.

Preferred Provider Organization (PPO) plans

Under a PPO plan, both you and your family can see any health care provider in the insurance company’s network, including specialists, without a referral. In most cases, you are not required to choose a primary care physician or to get referrals to see specialists. You will typically have copayments for any non-preventive medical care you receive, and you may have an annual deductible. Individuals who visit a specialist regularly generally prefer this type of health insurance. Since 2014, the popularity of PPO plans has declined.

Exclusive Provider Organization (EPO) plans

With an EPO plan, you have access to all of the health care providers within the EPO network, including specialists. Whereas PPO plans may offer you some coverage outside of your network, EPO plans typically will not (except for emergencies). EPO plans can be suited well to individuals who don’t mind limiting themselves to providers within a network and who don’t want to coordinate their care through a primary care doctor. Since 2014, the popularity of EPO plans has increased.

Point of Service (POS) plans

POS plans are a hybrid of HMOs and PPOs. With a POS plan you will typically have to designate a primary care physician for regular check-ups and referrals. But you can also use out-of-network providers if you’re willing to pay more out of pocket; you’ll usually have a copayment and deductible as well. This type of plan is versatile, and can be right for people who are willing to pay a bit more for extra flexibility.

High Deductible Health Plan (HDHP) plans

High-deductible plans cross categories. Some are PPO plans while others may be EPO or HMO plans. This type of health insurance has a high deductible that you have to meet before your health insurance coverage takes effect. These plans can be right for people who want to save money with low monthly premiums and don’t plan to use their medical coverage extensively. HDHPs are often coupled with a Health Savings Account (HSA). If you already contribute money to an HSA, you can buy an HSA-compatible health plan. Money contributed to an HSA can be saved on a pre-tax or tax-deductible basis to pay for qualifying medical expenses, including annual deductibles.

Short-term health insurance plans

Short-term health insurance plans do not comply with the Obamacare law. However, if you missed the Obamacare open enrollment period, a short-term health policy can provide you with some level of coverage you in the meantime.

Short-term insurance offers more limited benefits than major medical, but can help safeguard your finances in the case of a covered illness or accident. The downside to this type of coverage is that it does not meet the minimum essential coverage required by the Affordable Care Act, so you may also be subject to the tax penalty.

In addition, short-term plans can exclude coverage for pre-existing conditions. Short-term insurance is non-renewable, and doesn’t include coverage for preventative care such as physicals, vaccines, dental, or vision.
Note that some states and insurance companies may limit your ability to apply consecutively to short-term plans.

Gap insurance plans

Gap insurance plans are designed to provide an emergency safety net for unexpected medical costs, or other costs you may face in case of a medical emergency. If you don’t have a major medical policy, you might want to get gap insurance to get coverage in case of serious health issues. But, you can also get gap insurance even if you have a major medical policy or short-term policy, as a supplement to provide additional protection.

Gap insurance includes products like:

• Critical-illness insurance, which pays you a lump sum if you are diagnosed with cancer, heart attack, stroke, and certain other serious illnesses
• Accident insurance, which gives you a cash payout in case of covered accidents (separately from your automobile accident coverage)
• Fixed-benefit indemnity medical insurance, which provides cash payouts if you suffer from specific illnesses or injuries covered by your policy

Catastrophic Health Insurance

Another type of health insurance that carries a modest premium cost is catastrophic coverage. It is available on and off the Marketplace to individuals under age 30  and people age 30 and older who qualify for a hardship/affordability exemption (which means that due to unaffordability of coverage, economic hardship, or certain other hardships – such as the death of a family member – the person is not required to maintain health insurance coverage)

Ancillary dental and vision plans

The insurance plans described so far—major medical, short-term, and catastrophic—don’t typically cover routine dental or vision care. So, you may need to add separate plans for that kind of care.
To get coverage for dental exams, x-rays, cleanings, and fillings, you’ll need to choose a dental plan. Dental plans may also cover more specialized services such as orthodontia, periodontal treatments, veneers, bonding, dentures, and others.

For coverage for vision exams, eyeglass frames and corrective lenses, contact lenses, and other eye-related care, you’ll need to consider adding a vision plan. Keep in mind that a vision plan can be more critical as you or your family member’s age, even if you’ve never needed vision correction previously.

Finding the right insurance plan for you

To learn more about how you can save on individual and family health insurance, use our online tools to compare plans. If you are a small business owner interested in group health insurance options, visit eHealth’s small business resources or speak with one of our licensed health insurance agents, who can provide you with additional guidance and recommendations on how to find the optimal plan for yourself, your family, or your employees.

This article is for general information and may not be updated after publication. Consult your own tax, accounting, or legal advisor instead of relying on this article as tax, accounting, or legal advice.

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