Different Types of Health Care Plans
When it comes to deciding which type of health care plan is best for you and your family, the choices can be confusing. When considering a plan, reflect on your family's situation and whether the structure of the type plan you choose will meet your health and financial criteria. The major types of health care plans include: the fee for service, health maintenance organization (HMO), point of service plan (POS) and preferred provider organization (PPO).
The Fee-for-Service Plan
The fee-for-service plan (sometimes called an indemnity plan) is the most expensive option. With this plan you have control over which doctors or hospitals you use, and you can change doctors at any time. When signing up for the plan, you select a deductible for the year. This is the amount of money that you pay per person before the insurance company begins paying for services. After meeting that deductible the plan pays a percentage of your doctor or hospital bill. The typical percentage arrangement is 80/20. The plan pays 80 percent of the bill while you pay the remaining 20 percent. Because this tends to be the most expensive arrangement for families, it is the least popular selection for most people.
HMO
An HMO is a type of managed health care plan where medical care is rationed in an effort to save costs. It is in the interest of the HMO to ensure the health and safety of you and your family, so it covers all necessary treatments. The HMO provides you coverage with no deductibles for a fixed fee. You are a member of the HMO and typically are asked to choose a doctor in the plan, who will be your primary care provider. Your primary care provider will refer you to specialists or other doctors within the HMO network as needed.
PPO
A PPO is a managed care plan, where health care is rationed but to a lesser degree. Unlike the HMO, you have the choice to select the doctors and specialists you'd like to see, but you are encouraged to select doctors within the PPO. The PPO has a network of doctors it has contracted with to provide care at specific fees, and if you seek care within this network, your costs will be less than if you choose a doctor outside the plan.
POS
The POS is a combination of an HMO and PPO. Your primary care provider will refer you to specialists, just like in an HMO. Just like the PPO, if you decide to go to a doctor outside the plan, your bill will be higher than if you choose a specialist within the network. These plans are typically not as expensive as a PPO plan but are more expensive than an HMO.
Doing Your Homework
When selecting insurance for your family be sure that you know what you're choosing. Talk to your insurance agent to learn more about each plan. Understanding the different characteristics of each type health plan is imperative in order to select the right plan for you and your family.
Tags: your family, care plan, care provider, health care, primary care
