HMO, PPO, POS or Traditional Policy? What's the Difference?
The type of insurance plan you choose is important, and it is vital that you understand how each one works before you make your choice. Most insurance contracts run for one year, at the end of which you may renew or change companies.
Let's Take a Look at HMOs
One of the least expensive plans is an HMO (Health Maintenance Organization). Although the plan is usually less expensive, you have a limited list of doctors and hospitals from which to choose to benefit from the plan. You will have to pay out of pocket if you venture outside of the list of providers that participate in your HMO. You will be required to select a primary care physician (PCP) you will see for all of your healthcare, and you will not be permitted to see any kind of specialist without a referral from your PCP, except in the case of an emergency. An HMO will most likely require you to pay a co-pay for doctor visits and may include a deductible for hospital stays.
More Choices but Higher Premiums with PPOs
A PPO (Preferred Provider Organization) exercises less stringent controls over your choice of doctors and hospitals. There is often a longer list of doctors and hospitals associated with the PPO. The premium is typically higher, but you do not have to visit only doctors on the PPO list. You may use doctors who are "out of network," but you will pay a higher share of the cost than you would if you use an "in network" doctor. Also, a PPO plan does not require a referral from a PCP in order for you to see a specialist.
Where Does the POS Fit in?
Somewhere between HMO and PPO lies the POS (Point of Service) plan. As long as you stick with doctors and hospitals that are in network, your POS plan will pay according to the policy; however when you visit a doctor or hospital that is not in the network, you will have to pay considerably more than you would with a PPO plan. You may go outside of your plan to see a specialist or other provider, but you may be subject to additional co-pays or deductibles. Most HMOs, PPOs and POS plans have a limited amount that you will have to pay out-of-pocket.
Going Traditional is Nice if You can Afford It
The most expensive health insurance plan is usually the traditional indemnity plan. You may visit any licensed practitioner or healthcare facility. There is not a limited list. You will need to know the list of covered services in this plan, and whether or not there are any services that are not covered such as cosmetic surgery.
Look at your household budget, decide what is important to you in terms of healthcare providers, and choose your insurance plan.
The type of insurance plan you choose is important, and it is vital that you understand how each one works before you make your choice. Most insurance contracts run for one year, at the end of which you may renew or change companies.
Let's Take a Look at HMOs
One of the least expensive plans is an HMO (Health Maintenance Organization). Although the plan is usually less expensive, you have a limited list of doctors and hospitals from which to choose to benefit from the plan. You will have to pay out of pocket if you venture outside of the list of providers that participate in your HMO. You will be required to select a primary care physician (PCP) you will see for all of your healthcare, and you will not be permitted to see any kind of specialist without a referral from your PCP, except in the case of an emergency. An HMO will most likely require you to pay a co-pay for doctor visits and may include a deductible for hospital stays.
More Choices but Higher Premiums with PPOs
A PPO (Preferred Provider Organization) exercises less stringent controls over your choice of doctors and hospitals. There is often a longer list of doctors and hospitals associated with the PPO. The premium is typically higher, but you do not have to visit only doctors on the PPO list. You may use doctors who are "out of network," but you will pay a higher share of the cost than you would if you use an "in network" doctor. Also, a PPO plan does not require a referral from a PCP in order for you to see a specialist.
Where Does the POS Fit in?
Somewhere between HMO and PPO lies the POS (Point of Service) plan. As long as you stick with doctors and hospitals that are in network, your POS plan will pay according to the policy; however when you visit a doctor or hospital that is not in the network, you will have to pay considerably more than you would with a PPO plan. You may go outside of your plan to see a specialist or other provider, but you may be subject to additional co-pays or deductibles. Most HMOs, PPOs and POS plans have a limited amount that you will have to pay out-of-pocket.
Going Traditional is Nice if You can Afford It
The most expensive health insurance plan is usually the traditional indemnity plan. You may visit any licensed practitioner or healthcare facility. There is not a limited list. You will need to know the list of covered services in this plan, and whether or not there are any services that are not covered such as cosmetic surgery.
Look at your household budget, decide what is important to you in terms of healthcare providers, and choose your insurance plan.
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