Different Health Insurance Plans
There are a number of different types of private health insurance plans available in the United States today. This article provides an overview on individual or family plans. Private insurers have developed a wide range of differing coverage options, allowing individuals or plan sponsors to pick and choose a level of coverage that is suitable for their health needs and budgets.
Health Maintenance Organizations
Health maintenance organizations, or HMOs, are health care organizations that contract with service providers. Service providers, such as doctors or hospitals, agree to treat an HMO's patients because it will provide them with a higher volume of patients. In return, they agree to certain care guidelines and pricing restrictions. Typically, HMOs require the use of a primary care physician, who initially assigns the direction of further medical treatment.
Fee-for-Service Plans
Fee-for-service plans do not involve a preapproved network of health care providers. Traditional fee-for-service plans allow the patient a choice of virtually any doctor and hospital in the country. While fee-for-service plans involve a prepaid premium, they also often involve deductibles or co-insurance. In addition, many services, such as prescriptions, covered under other health insurance plans, may not be covered under fee-for-service plans.
Preferred Provider Organizations
Preferred provider organizations, or PPOs, are a hybrid of health maintenance organizations and fee-for-service plans. Like HMOs, PPOs involve the use of a preapproved network of hospitals, doctors and physicians. Many PPOs also require the insured to have a primary care physician. However, unlike HMOs, PPOs typically involve deductibles, co-insurance or other coverage-restricting options. Many PPOs will allow the use of out-of-network care providers, although the use of these out-of-network providers may shift a greater portion of the payment burden to the insured.
Point of Service Plans
Point-of-service plans are a hybrid of HMOs and PPOs. A point-of-service plan requires the appointment of a primary care physician who will direct patient care. The primary care physician must be from the point-of-service plan's preapproved, contracted network of physicians. The primary care physician can refer to either in-network or out-of-network providers. Typically, the point-of-service plan will reimburse in-network providers for the full amount of care, while reimbursing out-of-network providers only a portion, with the balance paid by the insured.
Limitations
Many of these plans offer limitations in patient coverage in which all or a partial payment burden is born by the insured. The most common of these limitations include: deductibles, where the insured pays a predefined amount of costs "out-of-pocket" before the insurer offers coverage; co-insurance, where the insured pays a predefined percentage of costs "out-of-pocket" and the insurer covers the balance; and co-payments, where the insured pays a predefined value of costs for each office visit or service performed.
Tags: care physician, primary care, primary care physician, fee-for-service plans, HMOs PPOs
