Types of Health Insurance
There are two basic types of health insurance to consider while shopping around for the best coverage. Each sort of coverage is unique, and each one can be split into smaller categories.
The two major types of health insurance are: traditional and managed care. If you split those two categories into smaller sub-categories, you will find that there are numerous other plans to consider. Both traditional and managed care include: traditional indemnity plans (fee-for-service); PPO (Preferred Provider Organizations); POS (Point-Of-Service) plans; and HMOs (Health Maintenance Organizations). While some people claim that certain plans are better than others, this isn’t necessarily true.
The type of plan that will be best for you really depends upon your individual needs and wants. Some people enjoy the freedom that a fee-for-service plan allows, while others enjoy the low cost HMO plans. Let’s start breaking down each type of plan beginning with the traditional health insurance. Traditional health insurance plans work a lot like car insurance plans. You have to pay a portion of the plan up front (deductible), and the company then pays for most of the medical bill. This kind of plan does not limit you to any one hospital or doctor, which makes the overall plan appealing.
Next up is the fee-for-service plan. This plan is slightly different from the traditional plan. Fee-for-service plans used to be the kind of plans that nearly everyone had. This sort of plan allows you to choose any doctors, hospitals, and specialists that you like. The one drawback of the fee-for-service plan is the fact that the deductible is usually quite high. Also, you may have to send a doctor’s bill into the insurer for reimbursement, which can be difficult to deal with if you don’t have the money up front. The other types of health insurance (PPO, POS, and HMO) will be discussed briefly below.
A PPO plan is generally less expensive, but these plans include a set of doctors and hospitals that are part of a network. If you want to see a medical professional that is outside of the network, there will be an additional fee to pay. POS providers are similar to PPO providers, though you’ll have to choose your Primary Care Physician from the start. When you purchase this type of policy, you will be given a list of doctors to choose form. In order to visit any kind of specialist within a PPO plan, you will have to get permission from your Primary Care Physician first. Lastly, the HMO plan is similar to a PPO and POS plan, but this type of insurer will insist that you visit only their doctors. In short, there’s no flexibility with an HMO plan.
As you can see, choosing from the different types of health insurance out there is no easy task. Spend some time trying to understand each plan, and then choose the one that is right for you. When it comes to health insurance, sometimes those flexible plans are a better choice.