Quick Guide To Private Health Insurance

Quick Guide to Private Health Insurance

Understanding what type of healthcare you need is the first step in obtaining access to vital care at an affordable cost. Having good health care coverage is important, not only to help you maintain your health for years to come, but to protect you in the event of a medical emergency.

For those interested in purchasing private health insurance coverage, there are several categories to choose from including traditional fee-for-service health plans, health maintenance organizations (HMOs) and preferred provider organizations (PPOs). Read below to learn the basics of each of these types of private health insurance plans and discover which type of private healthcare insurance best fits your needs...

Traditional Fee-For-Service (FFS)

Fee-For-Service (FFS) is the most traditional type of healthcare insurance. With a Fee-For-Service health plan, patients have the freedom to select any physician or specialist at any healthcare facility that they choose without having to get approval from their insurance provider beforehand. The insured pays the bill after treatment and then sends the claim to his or her insurance provider to get partially or fully reimbursed.

FFS plans offer two kinds of coverage: basic coverage and major medical coverage. With FFS plans, the insured pays the deductible every year and the deductible is met before the insurance kicks in. Exactly which expenses count toward that deductible depends on the plan, so be sure to read your plan carefully.

Health Maintenance Organizations (HMOs)

Health maintenance organizations, commonly called just HMOs, are a popular form of managed healthcare coverage. Instead of paying each time you receive medical service, you pay a set monthly fee. HMO carriers usually pay a small co-payment for visits as well. With an HMO plan, you are required to choose a primary care physician (PCP). Your primary physician is the one who you will go to for all of your basic healthcare needs.

If you require the services of a specialist or need x-rays or lab work, then your PCP has to write you a referral or you will have to pay more. HMOs require that your PCP be a network provider in order to take full advantage of your healthcare plan. Going outside of your HMO’s network will mean paying most or all of the cost of that care out of pocket.

Preferred Provider Organizations (PPOs)

PPOs are another form of managed private healthcare. As with an HMO, you pay a monthly fee rather than paying for each medical visit or service. PPO members are encouraged to select healthcare providers that are in-network too. However, members are allowed to use healthcare providers that are outside of network. In such a case, the insured would typically pay higher costs out-of-pocket.

Unlike an HMO plan, a PPO plan does not require that you get a referral from your primary care physician each time you need to see a specialist, provided that said specialist is in-network. PPOs tend to be more expensive than HMOs, but offer more flexibility.

Point-of-Service (POS)

Point-of-service plans offer yet another option for those interested in private health insurance coverage. These plans actually offer characteristics of both PPO and HMO plans. Basically POS plans offer greater flexibility than HMOs do, yet have more limitations than a PPO plan.

With a POS plan, the insured is asked to select a primary care physician from a list of in-network providers. This physician is the "point of service" for the insured and will be responsible for referring you to a specialist if necessary. Should you choose to visit a healthcare provider who is not in-network, you will be responsible for submitting reimbursement claims to your insurance provider. Some of your out-of-network medical care will be covered by your POS plan, but the percentage an insurance company will pay for those out-of-network charges is much lower.