For people that are contemplating buying health insurance, finding the right plan can be confusing. The first thing to understand is that no insurance policy will cover all of the cost of medical care. However it is still important to find health insurance that will protect you and your family’s financial interest in the event of a medical emergency.
Choosing A Health Insurance Plan
There are two types of health insurance plans, Fee for Service Plans and Managed Care Plans. This article will define both types of plans.
Fee for Service Plans
Fee for Service Plans allow individuals to visit almost any qualified medical provider that they choose. The way that these plans work is that after the insured pays their annual deductible. The insured pays a 20% copayment and the insurer pays the balance usually 80%. If the medical provider charges more than the generally accepted amount the insured is required to pay the balance. These plans are not popular because they cost more than managed care plans.
Managed Care Plans
Managed care plans have been designed to hold down their clients health insurance cost. There are three kinds of managed care plans Health Maintenance Organization Plans (HMO’s), Preferred Provider Organization Plan’s and point of Service Plans (POS).
Health Maintenance Organization Plans
Individuals that are enrolled in HMO’s typically pay a fixed cost for medical care. They must see a physician that is chosen by their HMO and make a copayment of $10 to 15 per visit. The downside to HMO’s is that patients must see a doctor that the HMO chooses except for in emergencies. Also some HMO’s have been known to limit their client medical options in order to keep down cost.
Preferred Provider Organization Plans
PPO’s do not require their clients to see specific doctors, but they provide clients with a discount if they use a provider within their PPO network. Many government and union plans are PPO’s and their members usually pay monthly premiums along with copayments of $25 to $30 when they see their medical provider.
Point of Service Plans (POS)
Point of Service plans are hybrid plans that combine elements of HMO and PPO plans. They are not popular because they cost more than HMO and PPO plans.