Health insurance coverage falls within the two categories of traditional and managed care. The cost of coverage is determined by plan type, deductible, copay and add-ins, such as maternity, dental and prescription plans. Quickquote.com defines the traditional plan type as fee-for-service. Managed care includes HMO (health maintenance organization), PPO (preferred provider organization) and POS (point of service) plans.
Traditional
Traditional insurance is better known as a fee-for-service type. This type of coverage allows you to choose doctors and health care providers without restrictions. Claims are submitted for the cost of a medical service. An annual deductible must be met before the plan starts reimbursing. Once the deductible is met, the plan will pay a percentage of the cost, usually about 80 percent.
Health Maintenance Organization
An HMO plan requires you to choose a primary care physician from a list of HMO providers. The primary care physician is responsible for your care, including the need for referrals to specialists. A copayment is required for each office visit or hospitalization.
Preferred Provider Organizations
A PPO plan offers slightly more flexibility than an HMO, according to MedHealthInsurance.com. With a PPO plan, you can choose treatment outside the network, but you will pay a higher percentage than if you use a PPO provider. You can also seek medical care from a specialist without the need for referral from a primary care physician.
Point of Service
A POS plan is a mix of the HMO and PPO. You will be required to have a primary care physician from the plan's network. You can choose a specialist on your own, in or out of the network, but you will pay more of the cost than if your primary doctor gives a referral.
Individual Health Insurance
The Agency for Healthcare Research and Quality recommends you consider your options carefully before selecting your plan. If you are seeking an individual health insurance plan, compare the total of the premiums, copays, coinsurance and deductibles of each policy. If the out-of-pocket costs are low, you will be paying more for your monthly premium. Take into consideration the option in choosing doctors and hospitals. Options may include traditional or a PPO plan.
Group Health Insurance
Group plans offered by employers will be more affordable than individual policies, but the available options may be limited. Because of the discounts given to large groups, HMO and PPO plans are much more affordable if provided through your place of employment. Medicare Advantage Plans are like group plans and are available as PPO, HMO, PFFS (private fee-for-service), MSA (medical savings account) and SNP (special needs plans).
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