|
How to Buy a Health Insurance
Part 2/4 - Types of Plans and Policies
Health Insurance Plans
There are basically two types of plans (available to both group and individual policy members)
- Traditional Plans - (aka Indemnity or Fee-for-Service) allow you to go to any physician you choose, but typically require that you pay for services, then file a claim for reimbursement.
- Managed Care Plans
- PPOs - an insurer contracts with a group of health care providers for lower fees in exchange for membership in the network. Consumers usually can choose who provides their health care service, but pay less in coinsurance with preferred providers than with non-preferred providers.
- HMOs - members pay a fixed monthly amount that gives them access to a wide range of health care services. In most cases, members also pay a set amount (called a copayment) for each doctor visit or prescription. HMO members have little or no paperwork to complete. They must use the HMO's network of providers (doctors, hospitals, pharmacies). Recent changes in the laws and regulations allow HMOs to offer plans with deductibles and coninsurance similar to PPOs.
- Point-of-Service Plans (POS) - plans that combine features of traditional plans with PPOs and HMOs. Consumers can choose between physicians within the plan or outside it. If they choose health care services outside the network the POS plan will usually require higher deductibles and coinsurance.
Plan Comparison
|
Traditional |
PPO |
HMO |
Choice of Providers |
No restrictions |
Free choice, encouragement to stay in network |
Usually limited to network |
Specialist Visits |
No referral required |
No referral required |
Referral required by primary care physician |
Travel |
Coverage available anywhere in US |
Coverage is available anywhere in US, coinsurance and deductibles are usually higher outside of network |
Coverage is limited to specific service areas and states |
Payments |
Premiums, deductibles and co-insurance (usually 20-30%) |
Premiums, deductibles, co-payments, and co-insurance (usually 20-30%) may apply |
Premiums and co-payments (usually between $5 and $25). Usually no deductibles apply. |
Other Types of Health Policies
- Major Medical Expense - covers serious illness or injury. Usually pays for hospital stays and physician services in and out of the hospital.
- Basic Medical-Surgical Expense - covers payments for medical care and surgical procedures.
- Specific Disease - policies that only pay if you contract the illness specified in the policy, e.g. Cancer, AIDs.
- Short-Term - coverage that only lasts up to 12 months.
|
Previous