5 Basic Types Of Health Insurance Plans That You Should Know
Health insurance plans can be divided in five core categories
. They differ from each other by offering divergent coverage and limitations. To find the best health insurance plan for their clients, health insurance agents are allowed to use health insurance leads. However, as a smart insurance buyer, do your part and understand what the types are before making a decision.
Health Maintenance Organization (HMO)
A Health Maintenance Organization is one of the most common types of health insurance. Most Americans buy their insurance through an HMO because that's the way most employers do it. HMOs are the most low cost insurance plan and might cover preventive health care, dentist, and eye doctor visits. HMOs provide their policyholders with a broad network of doctors, specialists and healthcare facilities. Policyholders decide on a primary-care physician who will guide all healthcare services and medical needs necessary. The physician is sort of like a gatekeeper in this aspect. When the primary-care physical refers the patient to the specialist or medical service, only expenses will be covered by the HMOs. One of the disadvantages of an HMO plan is that, of healthcare plans, it is definitely the most restrictive. Sometimes a plan requires that the patient pay a co-pay when visiting a doctor.
Preferred Provider Organizations (PPOs)
Being different from HMOs, PPOs do not require a referral from your primary care physician. But, cost-wise it is advantageous if the healthcare services and specialists chosen by the policyholder are within the PPO's own prescribed network. It is more expensive to source service and facilities from outside as it may require you to pay 20% of the total cost in advance and the remaining 80% is covered by the PPO.
Exclusive Provider Organization (EPO)
Somewhat similar to PPOs, but with a distinctly smaller network are Exclusive Provider Organizations, or EPOs. Unlike PPOs, EPOs normally do not offer coverage for services rendered by specialists outside their own network.
Point of service (POS)
Health insurance plans that fall under a point of service type is similar to PPOs in that they also have a primary-care physician. They also allow the insured to seek services from healthcare specialists outside its own network but is more expensive and requires additional paperwork to be complied.
Fee for service (FFS)
This is the least restrictive type you can get, and actually offers a wider range of specialists and facilities. To choose which doctor, facility or treatment they want, fee for service policyholders are given this discretion. Before the insurance provider gives money for these services, the insured has to pay a preset deductible amount. The insured is also normally required to pay 20% of the costs for every service he or she accrues. Stipulated in the insurance contract is the maximum amount required to be paid by the insured.
You need to complete a thorough assessment of your own medical care requirements and financial capacity when choosing a health insurance plan. In this way, you can get the most out of the advantages the one you select offers and offset the disadvantages.
by: Jacob Schiffer
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