When you buy personal health insurance, you’re going to be met with a variety of plans and options you have understand. Things like coverage amounts, deductibles, pre-existing conditions, and in and out of network doctors is enough to make anyone’s head spin but it’s best to start at the beginning. If you had insurance through a provider, you had to choose the best plan that worked for your circumstances and when you go to buy a personal plan, you are doing the exact same thing. You just have to know more about the plans that are offered. If you do your research, you should know which one will work best. The ones that follow are the most common and they all have positive and negative aspects. The most important part is that you can understand the difference between them all and make the right choice so that you don’t have a lapse in coverage.
Health Maintenance Organization (HMO)
An HMO plan is arguably one of the most common plans in the U.S. because it’s the one that employers use most often. With this kind of plan, you are going to pay a monthly premium for health benefits. One of the best things about this plan is that it includes preventive care which is a key way to prevent larger, most expensive illnesses. It can also include vision and dental which is a great add on. With an HMO, you normally choose a primary care physician who takes care of your normal colds and viruses and serves as your main point of contact for any health related issues. If you need to see someone else, your physician must refer you to an in-network doctor for your insurance policy to cover your care. A downside is that these plans often require a co-payment amount on each visit but it’s normally very affordable.
Preferred Provider Organization (PPO)
PPO is similar to an HMO in that it develops a network but one main difference is that you do not have to go to a main primary care physician to get treatment. With a PPO plan, you can choose from a network of medical facilities and have your visit covered up to a certain percentage after your co-pay is deducted. But, if you decide you would like to go out-of-network for your treatment, that is not a problem either. Just know that your coverage percentage will be reduced and your out of pocket expenses increased. With a PPO, you are going to have premiums you need to pay but you will also have a deductible amount.
Indemnity Plan (also known as Fee for Service)
With this kind of plan, you can go to any doctor you like and then the medical office is required to submit a claim to your health insurance company. Certain types of procedures are going to be considered covered while others will not so it’s best to know which ones qualify. Then, your insurer will determine what the ‘usual and customary’ cost is for your particular claim. They will normally match up to 80% and you’re responsible for the rest but if the doctor charges more than the normal rate, you are responsible for the extra money. Indemnity plans also have premiums and deductibles.
Point of Service (POS)
This plan combines the best of both HMO and PPO worlds. You are assigned a primary physician who can make sure all your medical records are in one place and track any changes in your history. You also know who you need to go see anytime you get sick. This is how a POS is similar to the HMO plan but then it also combines the convenience and flexibility of the PPO plan. Your primary doctor has the freedom to refer you out of network if it’s required and your insurance will still cover it up to a certain amount. Co-insurance and deductibles may apply but this is an affordable plan as well.
You should really know what’s important to you when looking for health insurance. If flexibility is a must, an HMO plan might not be for you. Speak with individual insurance companies to find the best mathc.