Today, you can’t ignore the need of having health coverage for yourself as well as your family. You never know when you will fall sick or have a sudden injury. With ever increasing medical expenses, having health insurance has become simply inevitable for everyone. Different types of health insurance plans provided by various insurance providers are available in market to choose from. The choice, however, completely depends on a person’s individual need and budget.
Basically two types of major health insurance plans are available in US; Fee-for-service plan and Managed care plan. Some people prefer a fee-for-service plan; while others prefer a managed care plan.
- Fee-for-service plans (FFS) – these are the most conventional type of health insurance plans. The insurance companies bear the expenses for the medical services provided to the policyholders. Such plans normally work in two ways,
- Non-PPO Fee-for-service plans – these traditional kinds of health insurance plan either directly pay the medical providers or approve payments after the policyholder files a claim for the medical services he has enjoyed. These plans let the policyholder visit the doctor or hospital of his preference. Non-PPO FFS plans are, however, expensive.
- Fee-for-service plan with a PPO – FFS plans with a preferred provider organization allow the policyholder to visit the medical providers who will reduce the costs, as per the plan. In such plans, the policyholders need to bear fewer out-of-pocket expenses. Besides, they are more likely not to file a claim or do paperwork. However, such plans don’t ensure PPO advantages for every medical service taken by the policyholder. Such plans also don’t ensure a local PPO.
- Managed Care Plans – such plans are somehow more popular in US. Through a managed care plan, the insurance companies control the costs of medical expenses. Such plans limit the medical services the policyholder can enjoy. These plans have lower co-payments and lower premiums than that of a FFS plan. The amount, however, varies from companies to companies and services to services provided even by the same company. There are usually three types of managed care plans available in our country; Health Maintenance Organization (HMO), Preferred Provider Organization (PPO) and Point Of Service (POS) plans.
- Health Maintenance Organization or HMO – HMOs normally pays for almost all medical expenses against a little co-payment. HMOs allow the policyholder to choose a provider from their own network of the medical providers. Otherwise, the policyholder has to change his plan.
- Preferred Provider Organization or PPO – a PPO is basically a combination of a FFS and a HMO. Like the HMOs, PPO plans allow the policyholder to visit the medical providers within their own network. He can control his out of pocket expenses by choosing a doctor or hospital within the network. However, the policyholder can also choose a provider out of the network; and, in such a case, he has to spend a larger amount from his pocket.
- Point Of Service or POS – to some extent, POS plans are similar to HMO plans. In such plans, the primary care medical professionals refer the patient or the policyholder to other medical providers within the network. Even if the primary care doctor refers the policyholder to a doctor out of the network, then also the plan pays for almost entire bill. However, if the policyholder chooses an out-of-the-network doctor by his own, then he has to bear co-payments.