Choosing the right health insurance plan is a top priority, but understanding the differences in health insurance can be a daunting task. Depending on where you live you may have various choices of companies and products within each company or be limited to just a few. A consumer can choose between a Health Maintenance Organization (HMO), Point-of-Service (POS), and Preferred Provider Organization (PPO).
The difference with an HMO plan is that the insured pays a monthly premium and a small, co-pay, typically around $25 for doctor's visits. The HMO covers the cost for XRAYS, hospitalization, care, and laboratory test. There is no deductible to meet before care is covered and usually a smaller out-of-pocket cost, if any. However, an HMO requires the insured see doctors only within the HMO network. The insured must maintain a primary care doctor who provides a referral to see a specialist and the wait to see doctors is typically longer. Monthly premiums are typically lower than most plans and as long as a patient stays in-network, co-pays are lower and they are not required to pay co-insurance.
A POS plan is an HMO that allows patients to refer themselves to specialist outside the plan instead of being required to visit their primary care doctor first for a referral. If a patient makes a referral outside of network the patient will be obligated to pay a co-insurance; however, if the primary care doctor refers the patient out of network, the cost is typically covered.
A PPO plan requires patients to see doctors within their network or preferred provider group to receive the most coverage; however, patients are able to see any doctor they prefer at a higher cost. A PPO plan pays for preventative care while the patient pays a co-pay and then covers other procedures after a patient has met a set deductible.
The difference with a PPO plan is a patient is required to pay co-insurance and meet a deductible before receiving services. A deductible is a predetermined amount that a patient must pay before a plan starts paying its portion of the plan's co-insurance and usually does not include doctors, office visits. The average deductibles range from $250-$5,000. Co-insurance is the amount the plan is willing to pay for non-office visit procedures such as a visit to the hospital. Co-insurance is broken down into percentages with the average amount being paid by the insurance company as 80% of the cost for service. However, some plans do offer a 70/30 split which will lower a patient's premium.
Deciding on health insurance is a tough decision, but knowing the difference in plans will help a patient make an informed one. Patients can contact the plans in their state through their websites or insurance agents and follow this guide to pick the right plan for themselves and their families.
Katie Appleby is an accomplished niche website developer and author. To learn more about health insurance please visit Affordable Health Insurance Today for current articles and discussions.
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