Individual Health Insurance Plans Information
Below is a brief overview of each of the four major types of medical insurance plans:
Preferred Provider Organization (PPO Health Insurance)
With PPO health insurance plans, the full expense of the medical treatment is covered as long as the treatment is provided by a doctor or hospital that belongs to the PPO's network of providers - hence the term "preferred providers." Treatment that is obtained outside the PPO health insurance plan network is covered at a reduced rate. It is the patient's responsibility to make up the difference.
Health Maintenance Organization (HMO Health Insurance)
HMOs place considerable restrictions on the non-emergency treatments that a patient may obtain. The upside of an HMO health insurance, however, is that the your out of pocket expenses are significantly lower than other medical insurance plans. Minimal paperwork is another benefit of an HMO health insurance plan.
With HMO medical insurance plans the patient pays a monthly premium. Sometimes there is a small co-payment. Patients have a primary care physician who then refers them to specialists when necessary.
HMOs are somewhat controversial because doctors have a financial incentive for reducing the amount of medical treatments provided to the patient.
Fee-for-service Medical Insurance
A fee-for-service medical insurance plan is the traditional type of medical insurance plan. With fee-for-service health insurance coverage the patient is able to choose any doctor they want and can change doctors at any time.
The patient pays a monthly fee which is called a premium. Also, the patient has a deductible, which is a set amount of money the patient must pay out of pocket for medical treatment before insurance payments kick in.
Once the deductible has been met, the insurance company pays a portion of the bill. For example, the insurance company might pay 80% while the patient pays 20% of the final bill for the treatment. Often there is a ceiling or cap on the amount of out-of-pocket expenses the patient must pay with a fee-for-service medical insurance plan, at which point the insurance company pays 100% of the bill.
Point-of-Service Plans (POS Health Insurance)
POS medical insurance plans are actually indemnity-type options which are offered by many HMOs. With a POS medical insurance plan, the policy holder can elect to see a physician outside of the network and still receive some coverage while making a co-payment. Because of this, POS plans are often described as being a combination of an HMO and a fee-for-service plan.
If the patient's primary care physician makes the referral, then the insurance company covers most or the entire bill. The patient chooses their primary care physician from members of the plan's network.
While these overviews paint a good general picture of how each individual health insurance plan operates, consumers should always conduct careful research before choosing their health insurance coverage. Even within a general category, such as a PPO, there can be considerable differences in coverage, co-pays and other critical issues.
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