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Types of Insurance
Fee-for-Service (FFS): Also known as “Indemnity” insurance, FFS is a type of health coverage that typically allows you to go to any doctor or provider. Your insurance company will reimburse your provider for each covered service provided. Deductibles and coinsurance usually apply in FFS coverage.
Preferred Provider Organization or better known as a PPO typically allows you to see any doctor, any time, as a PPO negotiates discounts with doctors, hospitals and other providers who become part of the PPO network. When you visit a physician in the network, you generally make a co-payment or a fixed fee for services provided. If you visit a physician out of the network, you may still receive coverage but the level of coverage is not as high. One of the most attractive features about a PPO is that you can see the doctor you choose including specialists within or out of the PPO network, without referrals. Plus premiums are generally lower than indemnity plans.
Health Maintenance Organization or better known as an HMO is a prepaid health care plan that provides a comprehensive, predetermined medical care benefits package providing a full range of health care services to the members of an HMO. Members receive all of the medical care from health care providers that are in the HMO network, which has been coordinated by a primary care physician. The patient must choose a primary care physician who manages the patient’s care including necessary referrals to specialists. Should the patient choose to use a physician or hospital outside of the HMO network, the patient is responsible for the payment of those services. In the event that an HMO lacks a particular type of medical service and authorizes the patient to use a service outside of the HMO network, the HMO will pay the cost. Out of pocket expenses are usually the lowest with this type of plan.
Point of Service Plan or better known as POS is a managed care plan that combines features of an HMO and PPO plan. When you enroll in POS plan, you must choose a primary care physician to monitor your health. The primary physician may make referrals outside of the network and then your health insurance company will offer only some compensation. Like an HMO, participants designate a network physician to be their primary care provider, but as with a PPO, patients may go outside of the provider network for health care services. When patients venture out of the network, they have to pay most of the cost unless the primary care provider has made a referral out of the network. In that case, the medical plan will pay for the services provided. The advantages of a POS are that you have maximum freedom and are not limited to only HMO network providers. Co-payments are low and there is no deductible and annual out-of-pocket costs are limited. The disadvantages are that co-payments for non-network care are high and there is a deductible for non-network care
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