How does an HMO plan work?

Though there are many variations, HMO (Health Maintenance Organizations) plans typically enable members to have lower out-of-pocket healthcare expenses but also offer less flexibility in the choice of physicians or hospital than other health insurance plans.  As a member of a HMO, you will be required to choose a primary care physician (PCP).  Your PCP will take care of most of your healthcare needs.  Before you can see a specialist, you will need to obtain a referral from your PCP.

With an HMO, you will likely have coverage for a broader range of preventive healthcare services than you would through another type of plan.  You may not be required to pay a deductible before coverage starts and your co-payments will likely be minimal.  With an HMO plan, keep in mind that you will  have no coverage for services rendered by a non-network provider or for services rendered without a proper referral from you PCP.

How does a PPO plan work?

As a member of a PPO (Participating Provider Organization) plan, you will be encouraged to use the insurance company’s network of doctors and hospitals.  These healthcare providers have been contracted to provide services to the health insurance plan’s members at a discounted rate.  You typically won’t be required to pick a primary care physician but will be able to see doctors and specialists within the network at your own discretion.

You will probably have an annual deductible to pay before the insurance company starts cover your medical bills.  You may also have a co-payment for certain services or be required to cover a certain services or be required to cover a certain percentage (coinsurance) of the total charges for your medical bills.

With a PPO plan, services rendered by an out-of-network physician are typically covered at a lower percentage than services rendered y a network provider.

What kinds of individual and family insurance plans are available?

Individual and family health insurance plans are usually described as either “indemnity” or “managed-care” plans.  Put broadly, the major differences concern choice of healthcare provider, out of pocket costs and how bills are paid.  Typically, indemnity plans offer a broader selection of healthcare providers than managed care plans.  Indemnity plans pay their share of the costs for covered services only after they receive a bill (which means that you may have to pay up front and then obtain reimbursement from your health insurance company),

There are several different types of managed-care health insurance plans.  These include HMO, PPO and POS plans.  Managed-care plans typically make use of healthcare provider networks.  Health care providers within a network agree to perform services for managed-care plan patients at pre-negotiated rates and will usually submit the claim to the insurance company for you.  In general, you will have less paperwork and lower out-of-pocket costs with a managed care health insurance plan and a broader choice of healthcare providers with an indemnity plan.