What are the two major types of health plans?


Editorial team Published on

Health insurance coverage is generally divided into two main categories: private (commercial) insurance and public (government-funded) insurance.

1. Private Health Insurance

Private health insurance is bought by individuals or provided by employers.

  • Funding: Paid through monthly premiums from the worker, the employer, or a private buyer.
  • Access: Obtained through a job or an individual marketplace like Healthcare.gov.
  • Common Plan Styles: Includes Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs), which dictate your choice of doctors and hospitals.

2. Public Health Insurance

Public health insurance is provided and funded by the government.

  • Funding: Paid through federal and state tax revenues.
  • Access: Limited to people who meet specific rules for age, income, or service.
  • Examples: Programs like Medicare for adults aged 65 and older, and Medicaid for low-income individuals.