Health insurance is an essential tool for managing healthcare costs, ensuring access to critical medical services, and protecting financial well-being. In the United States, millions of people rely on health insurance, but not all plans offer the same value or benefits. Knowing what makes for better health insurance and understanding the most common plans can help individuals and small business owners make informed decisions.
In this article, we’ll explore the health insurance plans most commonly purchased in the U.S., the facts people often overlook, and the significant improvements seen in 2023 and 2024.
What Makes a Health Insurance Plan “Better”?
1. Comprehensive Coverage
Better health insurance includes coverage for essential health benefits such as preventive care, hospitalization, prescription drugs, mental health services, and maternity care. According to the Affordable Care Act (ACA), all marketplace plans must provide these benefits, ensuring a baseline level of care.
2. Affordable Premiums and Out-of-Pocket Costs
Good health insurance plans balance premiums with manageable deductibles, co-pays, and out-of-pocket maximums. A 2024 report by the Kaiser Family Foundation noted that average premiums for employer-sponsored plans increased by 6%.
3. Accessibility
A plan’s network should include a wide range of in-network doctors, specialists, and hospitals. Limited networks can increase out-of-pocket expenses if care is sought outside the network.
4. Flexibility for Changing Needs
A better plan allows individuals to adjust coverage as their healthcare needs evolve, such as adding dependents or accessing specialists.
The Most Common Health Insurance Plans in the U.S.
1. Employer-Sponsored Health Insurance
Employer-sponsored plans remain the most common type of health insurance in the U.S., covering nearly 159 million Americans as of 2023. These plans often include:
- Health Maintenance Organizations (HMOs): Lower premiums, but restricted to in-network providers.
- Preferred Provider Organizations (PPOs): Higher premiums with the flexibility to see out-of-network providers.
- Exclusive Provider Organizations (EPOs): Similar to PPOs but without out-of-network coverage.
2. Marketplace Plans (ACA)
Individual plans purchased through the ACA marketplace are popular among freelancers, sole proprietors, and small business owners. These plans are categorized into four tiers:
- Bronze: Low premiums, high out-of-pocket costs.
- Silver: Moderate premiums and out-of-pocket costs, often subsidized for low-income families.
- Gold: Higher premiums, lower out-of-pocket costs.
- Platinum: Highest premiums, lowest out-of-pocket costs.
3. Medicaid and CHIP
Eligible individuals and families receive low-cost or free health coverage through Medicaid and the Children’s Health Insurance Program (CHIP). The ACA expansions have led to higher enrollment numbers which are most significant in states that implemented Medicaid expansion.
The Medicaid program stands as a fundamental healthcare resource for more than 83 million low-income Americans who receive comprehensive health and long-term care services. The program represents a fifth of the nation’s healthcare budget and pays for over half of long-term care costs.
The federal and state governments co-fund Medicaid which provides states with some discretion to set their own eligibility criteria and service offerings leading to diverse coverage options and different spending levels among states.
Medicaid covers a diverse range of populations, including:
- Children: Medicaid benefits reach 40% of children while more than 80% of children living in poverty receive these benefits.
- Adults: Medicaid serves one-sixth of all adults while nearly half of impoverished adults become beneficiaries.
- Minority Groups: Black, Hispanic and American Indian or Alaska Native (AIAN) children and adults receive Medicaid coverage at higher rates than their White peers.
- Individuals with Disabilities: Approximately 25% of adults between 19 and 64 who live with disabilities gain access to Medicaid to support their fundamental requirements for hearing, vision, cognitive function, and mobility needs.
The wide-ranging Medicaid coverage plays a vital role in minimizing healthcare inequalities and delivering fundamental services to America’s most susceptible groups.
Impact of Medicaid Coverage on Access to Care, Health Outcomes, and Financial Protection
The Medicaid program serves as an essential component in enhancing healthcare access for beneficiaries. The federal regulations that limit out-of-pocket expenses enable Medicaid recipients to access medical services more effectively than those who lack insurance coverage.
Access to Care
Medicaid participants tend to gain healthcare access that matches the levels achieved by those who possess private health insurance coverage. Some healthcare providers like psychiatrists and dentists prove difficult for people to access. Systemic issues like reduced provider compensation rates and physician shortages in impoverished regions cause this problem.
Health Outcomes
Medicaid provides numerous advantages that reach beyond simply offering immediate medical care access. Research demonstrates that childhood Medicaid coverage leads to fewer avoidable hospital stays and reduces death rates. The positive health impact extends beyond children because Medicaid expansions to low-income adults result in improved self-reported health status and increased early cancer detection which reduces mortality rates from diseases like cardiovascular disease and liver disease. The program strengthens management for chronic diseases such as diabetes and HIV while producing better outcomes for individuals with substance use disorders.
Financial Protection
Medicaid coverage extends beyond health benefits by delivering financial protection to enrollees. Studies by the National Bureau of Economic Research found that Medicaid expansions under the Affordable Care Act lessened financial pressures for consumers. Medicaid beneficiaries experience fewer unpaid medical bills and reduced medical debt collections which demonstrates Medicaid’s effectiveness in protecting them from overwhelming healthcare expenses.
Medicaid coverage stands as a vital component because it enables better access to essential healthcare services while simultaneously supporting improved health outcomes and substantial financial protection for beneficiaries.
The distribution of Medicaid funds demonstrates significant disparities when analyzed according to the eligibility criteria of age and disability. Only 23% of Medicaid enrollees are seniors and people with disabilities yet they represent 51% of total program costs. Children make up 34% of Medicaid enrollees but their share of spending amounts to only 14%.
The cost variation between groups explains this disparity. Medicaid allocates significantly higher expenditure per enrollee for seniors aged 65 and above and for those with disabilities. Medicaid spends roughly $18,923 per senior enrollee and approximately $18,437 per enrollee with disabilities.
These populations require more healthcare spending because they have complex medical needs. Individuals who are older or disabled typically need extended care because chronic conditions affect them more frequently resulting in higher medical expenses.
Moreover, there’s noticeable variation across states. Medicaid expenditures for high-need groups represent only one-third of the budget in both Alaska and Nevada. The Medicaid budgets of Alabama and Florida allocate as much as two-thirds of their funds to supporting seniors and people with disabilities demonstrating how states have different spending priorities based on demographic requirements.
Understanding Section 1115 Demonstration Waivers
States can use Section 1115 demonstration waivers to examine creative Medicaid solutions that differ from traditional federal guidelines. These waivers enable states to adjust Medicaid practices to improve resident outcomes while ensuring consistency with Medicaid’s principal objectives.
How They Influence Medicaid
- Flexibility in Implementation:Section 1115 waivers provide states with the authority to customize their Medicaid programs according to their specific requirements. States use this flexibility to experiment with innovative approaches which mirror the evolving governmental priorities from federal administrations and local authorities.
- Expanding Coverage and Benefits:The waivers enable states to extend their Medicaid coverage and establish additional benefits. States may introduce policy adjustments like new premiums while modifying eligibility standards for current Medicaid beneficiaries.
- System and Financial Restructuring:Through these waivers states gain the ability to make substantial changes to both delivery systems and financial structures. States can use waivers to authorize new payment models like incentive-based payments and supplemental payments to promote efficient healthcare delivery.
- Varied Scope and Focus: These waivers exhibit a wide range of possible applications. A number of states are considering broad waivers to transform substantial parts of their Medicaid systems whereas other states prefer to implement limited waivers that address particular groups or services within Medicaid.
Current Usage
Each state implements a minimum of one Section 1115 waiver while certain states participate in several waiver programs at once. State Medicaid programs receive significant influence from these waivers because they enable solutions that meet specific healthcare challenges within different localities effectively.
How Medicaid Supports Long-Term Care and Unique Health Services
In the U.S. healthcare system Medicaid serves as an essential provider of financial support for long-term care services. This program functions as a foundational support for these crucial services by covering most of their costs. Vast medical and personal care needs often remain unmet through standard health insurance plans, making this coverage essential to numerous people.
Medicaid functions beyond long-term care by delivering unique health services which meet diverse patient requirements.
- Non-Emergency Medical Transportation (NEMT):Through its transportation services Medicaid enables beneficiaries to reach their medical appointments while also providing a solution for individuals who lack reliable transportation options to access health care services.
- Comprehensive Child Health Services: The EPSDT program under Medicaid offers full healthcare services to support children’s health needs. The initiative provides essential preventive and diagnostic care to young people which supports their healthy development.
In summary, Medicaid not only funds essential long-term care but also delivers critical services that support broader health and well-being, reinforcing its value beyond traditional insurance offerings.
How is Medicaid Financed, and What Role Do States and the Federal Government Play?
Funding Structure
State governments and the federal government work together to run Medicaid. The program relies on a joint partnership that divides financial responsibilities between state governments and the federal government. The basic structure of Medicaid funding involves both state financial contributions and federal monetary support. States do not have spending limits for Medicaid unlike other federal programs because they qualify for federal matching funds for services offered to eligible enrollees.
Federal Matching Funds
States receive matching funds from the federal government to help pay for their incurred costs. The federal match initiates at 50% but adjusts upwards based on the financial conditions of each state. Federal assistance to states operates on a sliding scale based on per capita income so that states with lower income levels receive more support to fulfill healthcare needs across their populations. The federal government provides a substantial match for certain groups and services through the Affordable Care Act expansion by covering 90% of the costs.
State Flexibility
Within their borders states maintain substantial control over the administration of Medicaid. States determine both the populations eligible for Medicaid and the specific healthcare services covered by the program. States have the authority to set their reimbursement rates for healthcare providers which produces differences in both Medicaid spending and coverage across various states.
Economic Impact
The amount spent on Medicaid increases when the economy goes through downturns. Residents increasingly rely on Medicaid for healthcare coverage when they lose their jobs and income. During economic hardships the federal government may temporarily boost its Medicaid funding portion which helps states handle increased demand while protecting their financial plans.
Medicaid operates as a dynamic program that receives financial support from state and federal sources and adjusts to economic conditions to serve its beneficiaries effectively.
Medicaid provides essential financial support to the U.S. Healthcare system through extensive expense coverage. Medicaid represents 19% of the nation’s entire healthcare expenditure. This program generates 19% of the total hospital spending (KFF,2025).
4. Medicare
Medicare primarily serves individuals aged 65 and older, covering hospitalization (Part A), medical services (Part B), and prescription drugs (Part D). Medicare Advantage plans, offered by private insurers, provide additional benefits like dental and vision coverage.
5. High Deductible Health Plans (HDHPs) with HSAs
HDHPs paired with Health Savings Accounts (HSAs) are becoming increasingly popular due to their low premiums and tax advantages. These plans are ideal for healthy individuals who rarely need medical services.
Facts People Tend to Overlook About Health Insurance
1. Preventive Services Are Often Free
Under ACA guidelines, most plans cover preventive services like vaccinations, screenings, and annual check-ups without co-pays.
2. Mental Health Coverage is Required
The Mental Health Parity and Addiction Equity Act ensures that mental health benefits are equal to physical health benefits, yet many individuals are unaware of the extensive services included.
3. Out-of-Network Costs Can Be Prohibitive
Even with a good health insurance plan, using out-of-network providers can lead to significantly higher costs. According to a 2024 report by the Commonwealth Fund, 45% of insured Americans faced unexpected medical bills, many due to out-of-network charges.
4. Telehealth is Expanding
Telehealth services, which became widely adopted during the COVID-19 pandemic, are now standard in most plans. They provide affordable access to healthcare, particularly for rural residents.
Improvements in Health Insurance Plans in 2023 and 2024
1. Enhanced Subsidies for ACA Marketplace Plans
The American Rescue Plan Act’s enhanced subsidies were extended through the 2025 plan year, ensuring more affordable coverage for low- and middle-income families.
2. Expanded Telehealth Services
A 2024 CDC report highlights that telehealth services are now covered for mental health, chronic disease management, and even specialized care in most plans.
3. Greater Access to Medicaid
New Medicaid expansion states like South Dakota and North Carolina have increased coverage for low-income adults, reducing the uninsured rate.
4. Reduced Prescription Drug Costs
The Inflation Reduction Act introduced price caps for insulin and other medications under Medicare, benefitting millions of Americans.
5. Improved Mental Health Coverage
Employers are increasingly including mental health services in their health plans, addressing issues like burnout and workplace stress.
How PEO4YOU Helps You Find Better Health Insurance
Navigating the complexities of health insurance can be overwhelming, especially when seeking good health insurance plans tailored to individual or business needs. As an intermediary, PEO4YOU bridges the gap between people and insurance providers, offering personalized guidance to ensure clients find better health insurance options.
1. Tailored Recommendations
PEO4YOU evaluates your specific needs—whether you’re a sole proprietor, small business owner, or independent contractor—and matches you with plans that balance cost and coverage.
2. Access to Top Providers
By working with a network of trusted insurance companies, PEO4YOU ensures you have access to the best health insurance options in your area.
3. Simplified Enrollment Process
PEO4YOU helps clients navigate enrollment, ensuring they understand their options and avoid common pitfalls like choosing inadequate coverage or missing deadlines.
Conclusion: Why Better Health Insurance is Within Reach with PEO4YOU
In a healthcare system full of complexities, finding better health insurance can feel like a daunting task. Understanding the most common plans, their benefits, and recent improvements is crucial for making informed decisions. Whether you’re seeking individual coverage or a comprehensive plan for your small business, better health insurance is about balancing affordability, accessibility, and comprehensive care. With PEO4YOU as your guide, you can confidently navigate the world of health insurance, connecting with good medical plans tailored to your needs. As an intermediary, PEO4YOU ensures that finding the right plan is straightforward and stress-free, empowering you to focus on what truly matters—your health and well-being.
