Health insurance can be confusing, which is why some people put off buying it. Unfortunately, not having any health insurance can be an even costlier mistake. Health insurance allows you to receive medical care at lower prices than people who don’t have insurance. And if you have health insurance through your job and you switch jobs, federal law makes it easier for you to get new coverage. If you develop a serious health condition while you’re uninsured, however, it may be harder to get health insurance later because you’ll be categorized as having a pre-existing condition. 

The good news is if you focus on the basics you need to know, you’ll be able to get the care you need at the cost you can afford. The first step is to know what kind of policy you have because different plans have different benefits and drawbacks. Here’s how the most common health insurance plans compare:

• An HMO (health maintenance organization) typically has lower costs and covers a wide range of services, including preventive care, but offers a limited choice of doctors and hospitals in its network. Generally, an HMO plan will assign you to a primary-care physician who will coordinate all of your care; you will need a written referral to see a specialist in the HMO’s network.
• An HMO with a point-of-service (POS) option is similar to the general HMO plan but will allow you to see a primary-care doctor or specialist outside the network if you pay part of the cost; because of this added flexibility, premiums may be somewhat higher than with the traditional HMO plan.
• A PPO (preferred provider organization) plan is more expensive than an HMO but allows you to choose your own doctors or hospitals, offering a fee-reduction for using those in the network. With this plan, you don’t need a referral to see other doctors or specialists; if you do see an out-of-network doctor the fee will be higher, though you’ll still get some coverage.
• High-deductible health plans (HDHPs), also known as consumer-directed health plans, provide coverage only after meeting a set deductible, typically from $1,000 to $10,000. Because of the high deductible, the monthly premiums are much lower. Some HDHP’s offer some reimbursement for preventive services, such as immunizations, before you’ve met the deductible, and most give you access to the discounted rates insurers negotiate with doctors and hospitals so you’ll end up paying lower fees for care.
• Fee-for-service plans, also called indemnity plans, allow you to choose a doctor or hospital with few, if any, restrictions. But you will pay more for this flexibility, and you also may receive less reimbursement from the plan for basic check-ups and other preventive services.

Regardless of the type of health insurance you have, you’ll want to pay attention to key considerations—whether you need to get pre-authorization for hospital care, how to properly file your claims, how to read your benefits statement, what prescription drug benefits your plan covers, and whether you can save money by ordering through a mail-order program. This way, you’ll be able to get the maximum coverage from the plan you have.