Four Types of Plans
Fee-for-Service Plans
This is the insurance coverage many think of when considering their health care options. In this scheme, a customer can receive health care coverage from almost any doctor or medical facility, as long as the service received are covered by their insurance. In exchange for not being limited to a doctor affiliated directly with the insurance company, customers tend to pay slightly higher premiums than they would if they were on a managed plan (more on those later).
A fee-for-service plan essentially works like this: Clients are responsible for paying a monthly fee to the insurance company (called a premium) in exchange for coverage. In addition to this, if the customer comes under medical care, they also pay a deductible, which is an amount a customer must pay out-of-pocket for any medical expenses before their insurance company begins paying its portion.
Premiums and deductibles are often proportional to one another- for example, if a client pays a high premium, their deductible might be quite low. A low premium and they may have to pay a very high premium before their insurance provider begins paying a portion. Customers attempt to choose a combination that will fit their budget and anticipated medical needs.
Once the deductible is met, the insurance company will then pay a portion of the accrued medical fees, according to the terms of the insurance policy. Generally speaking, the insured is still responsible for part of the bill - this is called 'coinsurance.' However, the percentage is usually significantly smaller than the portion the insurance pays, and there is typically a ‘cap’ on how much any individual must pay per year out-of-pocket.
HMOs
HMOs, or health maintenance organizations, are health plans in which a client (or their employer) pays a certain monthly premium for comprehensive ‘in-network’ care.. Premiums are typically lower than in a fee-for-service plan, but in exchange, clients are limited to doctors and facilities that the HMO has under contract (though exceptions are of course made for medical emergencies). These contracts guarantee various physicians business, and in return, they provide discounted services, usually resulting in a lower cost to the customer.
Generally, a customer will pick a 'primary care physician' to act as their gateway to the various services an HMO offers. This physician may be a general practitioner who handles their day-to-day check-ups, but they are also the only way a patient can gain a referral to see a specialist. Additionally, a small co-pay may be required for common requests -- a physical, a prescription, etc. Though the plan may be more limiting than a fee-for-service option, it is typically cheaper, and often requires less paperwork than the claims-filing of fee-for-service plans.
POSs
POSs (point-of-service plans) are quite similar to HMOs. The main difference is that a doctor in the HMO network may refer the patient to an out-of-network physician without the client losing coverage. Clients may also refer themselves to an out-of-network care provider, but they will generally then have to pay coinsurance.
PPOs
Preferred Provider Organizations or PPO plans have qualities of both fee-for-service options and HMOs. Like an HMO, PPOs have a network of 'preferred' physicians and health care facilities, for which care is covered completely but for a small co-pay.
Patients can choose a primary care practitioner within this network and pay little other than the premiums and said co-pay. However, should they choose, they can also go out-of-network and still keep a degree of coverage (depending on the terms of their plan). In this instance, they will end up paying for a larger amount of the bill themselves, and will also have to file claims with their insurance providers, rather than just showing their insurance card. Though the options may seem confusing, they become clear with a little time spent on research.
One should not be afraid to ask potential service providers for information on the specific plans they have available for -- it is worth the effort to guarantee that if a medical emergency occurs, care is available- or, perhaps more importantly, to make sure preventative care that might head off just such an emergency is never forgone because of rising medical costs.