Health Insurance Basics
A brief introduction to key Health Insurance types: Fee-for-Service, HMO Coverage, PPO Coverage, and POS Coverage.
What Is Health Insurance?
Health Insurance is insurance that can protect you against the financial risks of being ill. There are several types of Health Insurance, each having somewhat different characteristics. Some of the key types of Health Insurance are: Fee-for-Service (or Indemnity), HMO (Health Maintenance Organization) Coverage, PPO (Preferred Provider Organization) Coverage, and POS (Point-of-Service) Coverage.
Fee-for-Service
Fee-for-Service (or Indemnity) is the traditional type of Health Insurance, which offers you optimal flexibility: you can choose any doctor and use any hospital, anywhere in the country. The policy will typically specify a yearly deductible (e.g., $250 or $500), and you will be reimbursed for a percentage (e.g., 80%) of the medical costs above the deductible that are covered by the policy.
HMO
HMO (Health Maintenance Organization) coverage provides comprehensive care for the insured, provided by doctors and hospitals that have agreements with the HMO. Care from providers outside this network is normally not covered, although exceptions can be made in emergencies.
PPO
PPO (Preferred Provider Organization) coverage is a cross between Fee-For-Service and HMO Coverage: you normally use one of the Preferred Providers that are part of the plan, but you may use doctors outside the plan and still receive some coverage.
POS
POS (Point-of-Service) coverage combines the features of an HMO and a PPO. You are covered for care provided by your Primary Care Physician. If you yourself seek medical help from providers that are not part of the plan, you will not be reimbursed, but if your Primary Care Physician refers you to a specialist outside the network, your insurance will cover most of the associated costs.
Preventive care and health improvement programs are often important components of HMO, PPO and POS plans.
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