Health Insurance Plans Explained
While the price of your health insurance policy will be difficult to determine (see Health Insurance Rates) most health insurance comes in three forms:
1. Fee-For-Service Health Insurance – This is a very straight-forward kind of health insurance where a patron will pay the usual fees associated with health insurance (a monthly premium, deductible, and/or co-payment – see Health Insurance), with the insurance provider covering expenses associated with medical appointments and procedures.
Because this is a common form of health insurance, there are various forms of the fee-for-service model.
Basic fee-for-service covers smaller medical expenses, like short hospital stays, x-rays, and doctor visits. There is usually a cap as to the amount of coverage that will be provided in these plans.
Major medical fee-for-service plans cover more expensive injuries and illnesses.
Comprehensive fee-for-service plans generally combine the features of Basic and Major Medical fee-for-service plans, offering the largest amount of coverage for the individual.
2. HMOs (Health Maintenance Organizations) – Health insurance plans offered through HMOs rather than fee-for-service plans differ in that patrons must generally receive medical care through HMOs or HMO-approved facilities only. This can make it more difficult to get an appointment as the number of providers an individual can see may be limited to only a few. But making, and having appointments paid for, can be easier with an HMO as there is less paperwork with providers and procedures that are pre-approved.
A variant of HMO plans are POS (Point of Service) Plans which allow patrons to refer themselves, or be referred by their physicians, to doctors and facilities not part of the HMO or HMO-approved list; coverage with POS plans will still be provided by the HMO even though the medical procedure happens outside of it.
3. PPOs (Preferred Provider Organizations) – Similar to POS plans, PPOs allow patrons to select from a list of PPO or PPO-approved professionals for medical procedures, but they also allow the use of doctors outside of the PPO or PPO-approved list. This allows patrons the flexibility of an HMO (less paperwork), with the convenience of being allowed to visit a familiar doctor, who may be out-of-network, and still receive coverage.
Finally, Managed Care is a feature in almost all health insurance plans (fee-for-service, HMO or PPO) that allows health insurance providers to require pre-approval for any or all procedures and appointments in order for a patron to ensure coverage. While this allows health insurance providers a way to ensure that no unnecessary medical procedures receive coverage, managed care places a responsibility on health insurance patrons to ensure that they communicate with their health insurance provider before expecting coverage for any medical procedure.