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Types of Private Health Insurance

Private health insurance is provided by a private health organization, either individually or through an employer. While some companies offer employees only one health plan, others offer many different types of insurance plans. You should consider certain differences between those plans that may affect which choice you make.

  1. Fee-for-Service

    • This type of health insurance used to be the norm in all health insurance plans, according to the QuickQuote website. You can choose the doctors, hospitals and other health care providers you want, including specialists, though you may need approval to visit the emergency room. This type of plan involves the most out-of-pocket expense with a high deductible you must meet before the insurance company begins paying. You might have to pay the entire amount up-front and then get reimbursed by the insurance company. Some fee-for-service plans do not cover preventive care, and premiums tend to be higher in general.

    Health Maintenance Organization (HMO)

    • HMOs are the opposite of fee-for-service plans in terms of flexibility, and they tend to be the least expensive. The plan usually has a low or non-existent co-payment with little paperwork and low premiums. The HMO requires that you see doctors within the HMO network and get a referral from your primary care physician to see a specialist. You also must get clearance to visit an emergency room. You will receive little to no coverage if you visit a doctor outside the network, says QuickQuote.

    Preferred Provider Organization (PPO)

    • A PPO arranges lower fees with a network of health care providers, which gives you a lower co-pay when you stay within that network. PPOs let you choose a specialist as long as it is one in the preferred network. There are additional expenses if you go outside the network, and you might have to pay the whole bill and then submit it to the insurance company for reimbursement. A PPO is somewhat like a combination of a fee-for-service plan and an HMO, according to the Health Insurance Guide at the ForeignBorn.com website.

    Point-of-Service (POS)

    • A POS is similar to a PPO, though your primary care physician must refer you to specialists, like at an HMO, for you to get full or nearly full coverage. If you pick a specialist outside the network, you'll face more paperwork and higher fees. POS plans usually cover more preventive care, health improvement programs and discounts at health clubs than the other plans.

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