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Types of Medical Insurance Coverage

Trying to understand the differences in medical insurance coverage can be difficult. Public medical insurance, private individual coverage and three-letter provider plans leave many confused and frustrated. While some people have insurance provided through their employer, and some have private insurance they pay out of their own pocket, many people who have no medical insurance coverage at all.

  1. HMO Plans

    • Managed-care medical insurance companies, HMOs, have a list of doctors that you must choose from to be your primary care physician. If needed, this physician will refer patients to a specialist who is also a member of the HMO. HMOs have a list of hospitals where enrolled individuals can receive treatment, although some will cover any necessary emergency room visit even if the hospital is not a member of its group. Primary care physicians and specialists have a set fee or co-pay dictated by the HMO that the patient must pay at the time of service. Some HMO plans have prescription, dental and vision packages available to members.

    PPO Plans

    • Preferred Provider Option health plans allow members to choose from a list of physicians who have joined to provide medical care. This plan allows appointments with any physician or specialist in the group. Unlike an HMO, you do not have to see the primary care physician before visiting a specialist. Co-pays using a PPO plan may be higher, and these plans often have a deductible that must be paid before payments begin.

    POS Plans

    • Point of Service health-care plans provide a network of doctors who can provide primary care and specialized care. Patients are not limited to the network of doctors, but the co-payments to non-network physicians will be high. If you choose to use network physicians, your out-of-pocket expenses will be low, and as long as network physicians are used, there are no deductibles. Medical care outside the network will have a high deductible.

    Individual Health Plans

    • The annual fees for individual policies are higher than those who can purchase coverage through an HMO, PPO or POS. Deductibles are higher and can be expensive if an injury or sudden illness strikes. The individual can purchase additional policies to help offset the expense of unexpected injuries or illnesses. Long-term care, cancer treatments and disability plans provide additional benefits and payments, and in some cases, they pay cash if the policyholder is diagnosed with a life-threatening, debilitating or long-term medical condition.

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