Health Plans

With so many health plans out there, how do you know where to start? Read on to find out what the differences are, from HMO's to PPOs and more.

Types of Health Plans

The following are explanations of the various health plans available in the United States. These health plans are generally available from employers or through independent insurance companies.

Fee For Service

A fee for service health care plan is the most traditional of all health plans. Under this particular plan, users have a wide range of doctors and hospitals to choose from. You may also change doctors at any time or go to any hospital of your choosing.

There are two types of fee for service plans:

• Basic
• Major Medical

The basic service plan covers the cost of a hospital room, x-rays, care while you are in a hospital, and prescriptions. Major medical pays for long-term, high-cost illnesses and injuries; it takes over where basic coverage leaves off. An example of a fee for service plan that covers basic and major medical is BlueCross BlueShield.

Not all medical services are covered under a fee for service plan. Be sure to read all of the information on the insurance policy before you sign up for coverage. Typical fee for service plans require that you meet a deductible before they will cover any services. In addition, the insured person pays a monthly premium to their plan.

Costs to belong to a fee for service plan is usually higher than other health plans.

PPO

A PPO or preferred provider organization has a limited number of doctors and hospitals to choose from. There is usually a co-pay, which means you pay a set fee each time you have a scheduled doctor's visit. Those who use this type of insurance plan may also have to meet a deductible before their medical fees will be paid.

A PPO requires that you choose a primary care physician. This physician will need to make any referrals before you can visit another doctor. If you do not receive a referral from your primary care physician, the PPO plan may not cover any of the ensuing medical charges.

If you choose to see a physician outside of your PPO network, the plan may or may not pay the bill, or they may pay only a part of the bill.

HMO

HMO health plans are pre-paid plans. Members pay a monthly premium in exchange for comprehensive health care services. Those that belong to this type of plan have a limited number of doctors and hospitals to choose from. The focus of the HMO plan is preventative care. They encourage people in the plan to have regular check-ups, well-baby visits, and yearly physicals.

HMO members may have a co-pay for services that they receive, whether at a doctor's office or at the hospital emergency room. Since the care you receive is usually from a group of doctors under contract, the costs are lower for services rendered. For a family, this makes budgeting easier because the costs are generally predictable.

As with a PPO, a referral is usually required before you may see another physician, especially if they are outside of the HMO group you are enrolled in.

POS

A POS or point of service health plan is an indemnity plan. Under this type of plan, you may have a doctor refer you to doctors outside of the plan, or you may refer yourself. Generally, medical fees from a doctor referral are paid under the plan. If you refer yourself outside of the plan, you may end up footing the entire bill.

This type of health plan is usually less expensive and is generally used by single people who are in good health.

Choosing Health Plans

The types of health plans available vary depending on what your employer offers or the insurance company you are considering purchasing independent insurance from. If you are young, single and in good health, a POS insurance plan may be a good option.

HMOs and POS plans are considered good choices for young and growing families because the costs are kept to a minimum. Individuals with more disposable income or a history of illness and disease may opt for the more expensive fee for service plans.

Remember to read all policies thoroughly before subscribing to them. Make sure you understand what your exact premiums are, the coinsurance coverage, and deductibles before you sign on the dotted line.

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