Health, like the weather, can be very unpredictable. You can be at the prime of health one day and then fall sick the next. With rising prices of medication, hospitalization and doctors’ fees, health insurance plans have become an important investment for families and companies. The first step, though, in deciding on a good health insurance plan for you and your family or staff is to understand the different types of health insurance plans available. The following information on the different types of health insurance can help you make the right choice.
Fee-for-service.
Also called Indemnity Insurance, this type of health insurance plan pays for part or all of the fees for medical services such as consultation, check-ups, lab work and hospitalization. The advantage of fee-for-service plans is that you can choose which doctors and hospitals are included in your health insurance plan, as long as they are accredited by the insurance company. You pay for the service and make a claim to get reimbursed for what you spent if that particular medical service is covered in the policy.
Preferred Provider Organizations (PPO).
PPOs are a type of managed care health insurance plans which consolidate different hospitals, doctors and healthcare providers and gets them to give their services to plan holders reduced cost. For a fixed monthly premium, members get to choose their own doctors and hospitals from a pre-approved list and can also get the same coverage (for a higher premium) even if their personal doctors are not on the accredited list. Another advantage of PPOs is that you do not need a referral to be able to consult with a specialist.
Health Maintenance Organizations (HMO).
Health Maintenance Organizations, which are also a type of managed care health insurance plans, provide medical care on a pre-paid basis, where plan holders pay a monthly, annual or bi-monthly fee for healthcare. A primary healthcare doctor is selected from a list, and this doctor is in charge of all your healthcare needs. A referral is needed from your primary doctor before you can see a plan-accredited specialist. HMOs also focus more on preventive healthcare rather than treatment.
Point of Service (PoS).
The point of service health insurance plan combines the characteristics of both a PPO and an HMO. You also select a primary healthcare physician (like an HMO) and he becomes your “point of service.” He can then refer you to other specialists accredited by your health insurance plan. Should you decide to see other doctors not accredited by your PoS plan (like a PPO), you will be required to do all the paperwork and filing of reimbursements with your health insurance company.
Short-term health insurance. This type of health insurance plan is good for those who are in-between jobs or those who are still saving up for a complete plan. Short-term health insurance offers coverage for a limited period, for about 6 months--although some may offer coverage up to a year. This type of insurance was designed to cover for accidents and unforeseen illnesses rather than giving complete medical care or treatment. They also do not cover pre-existing medical conditions.
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