There are several types of health insurance, each with its own restrictions and benefits. When shopping for health insurance or enrolling in a company benefits plan, it helps to know the basics of each type to meet your individual situation. Most insurance plans either fall under the health maintenance organization (HMO), preferred provider organization (PPO), managed care or fee-for-service categories.
Health Maintenance Organizations
Health maintenance organizations, more commonly known as HMOs, are comprehensive health insurance plans that include doctor visits, hospital stays, surgery, emergency care, lab test, therapy and x-rays. According to ForeignBorn.com, HMOs usually limit who you can see for care to providers and hospitals that are in the HMO network, except in medical emergencies. A referral is usually required from your primary care physician in order to see a specialist.
Preferred Provider Organizations
Similar to HMOs, preferred provider organizations, or PPOs, have physicians and facilities that participate in the plan's network and offer coverage for patients using these providers. According to the American Association of Preferred Provider Organizations, PPOs offer more flexibility than other plans because they also provide coverage out of network. Choosing a provider in network will give you more coverage than choosing one outside the PPO network. Some people consider PPOs to be beneficial because they do not have to change primary care physicians to get some kind of coverage. Like HMOs, there may be small co-payments for office visits. You might pay higher co-payments for physicians outside of the PPO network. PPO plans require you to pay a premium each month, as well.
Fee for Service
Fee-for-service plans are traditional health insurance plans and provide the most flexibility when choosing a physician. Like other plans, you pay a premium in exchange for coverage. Most fee-for-service plans have a deductible that must be met before coverage begins. This means that if the individual deductible is $500, you have to pay $500 for medical care out of pocket before the fee-for-service plan begins to cover your care. However, routine physical examinations might be covered whether you have met your deductible or not. Many fee-for-service plans also have a cap which limits how much you will have to pay for medical coverage over the course of 1 year. After this cap has been reached, the insurance company provides full coverage or any medical expenses covered by the plan.
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