What types of health plans are available to me?

Where are the other health plans I am familiar with?

What is a PPO?

What is an HMO?

What is an MSA?

What is a POS?

What is an Indemnity Plan?

Health insurance plans usually are described as either indemnity (fee-for-service) or managed care. Indemnity and managed care plans differ in their basic approach. Put broadly, the major differences concern choice of providers, out-of-pocket costs for covered services, and how bills are paid. Usually, indemnity plans offer more choice of doctors (including specialists, such as cardiologists and surgeons), hospitals, and other health care providers than managed care plans.

Indemnity plans pay their share of the costs of a service only after they receive a bill. Managed care plans have agreements with certain doctors, hospitals, and health care providers to give a range of services to plan members at reduced cost. In general, you will have less paperwork and lower out-of-pocket costs if you select a managed care-type plan and a broader choice of health care providers if you select an indemnity-type plan.

Besides indemnity plans, there are three basic types of managed care plans: PPOs, HMOs, and POS plans.

Not all health plans sell health insurance directly to individuals and families. Many, like Aetna and Cigna, provide insurance predominately through employers.

A PPO is a Preferred Provider Organization. As a member of a PPO, you can use the doctors and hospitals within the PPO network or go outside of the network for care. You do not need a referral to see a specialist.

• If you obtain care from a medical provider outside of the PPO network, you will pay more for the service. For example, a PPO might pay 90 percent of the cost for a visit with an in-network doctor but only 70 percent of the cost for a visit to a non-network doctor.
• You will typically pay a copayment for each visit/service. These copayments are typically higher than an HMO copayment but not always.
• You will usually be responsible for paying an annual deductible.
If you join a PPO, you should find you have more flexibility than with an HMO, but your total out of pocket costs are likely to be somewhat higher.

An HMO is a Health Maintenance Organization. As a member of an HMO, you select a primary care physician from a list of doctors in that HMO's network. Your primary care physician will be the first medical provider you call or see for a medical condition. He or she will make any needed referrals to a medical specialist. Typically, these specialists will be part of the HMO network.

• If you obtain care without your primary care physician's referral or obtain care from a non-network member, you may be responsible for paying the entire bill. (with exceptions for emergency care)
• With some HMOs, you pay nothing when you visit in-network doctors. With other HMOs there may be a small copayment for the visit or service.
• With most HMOs you will not be responsible for paying a deductible.
If you join an HMO, you should find that you have few out-of-pocket expenses for medical care -- as long as you use doctors or hospitals that are part of the HMO.

An MSA is a Medical Savings Account. It is a tax-advantaged personal savings account used in conjunction with a high deductible health policy. Individuals can contribute money to this account on a pre-tax basis to set aside money for qualified medical care and expenses, including annual deductibles and copayments.

POS is a Point-of-Service Plan A type of managed care plan combining features of health maintenance organizations (HMOs) and preferred provider organizations (PPOs). You can decide whether to go to a network provider and pay a flat dollar or to an out-of-network provider and pay a deductible and/or a coinsurance charge.

An indemnity plan is commonly known as a fee for service or traditional plan. If you select an Indemnity plan you have the freedom to visit any medical provider. You do not need referrals or authorizations; however, some plans may require you to precertify for certain procedures.Most indemnity plans require you to pay a deductible. After you have paid your deductible, indemnity policies typically pay a percentage of "usual and customary" charges for covered services; often the insurance company pays 80% and you pay 20%. Most plans have an annual out of pocket maximum and once you've reached this they will pay 100% of all "usual and customary" charges for covered services.
Many health insurance companies have moved away from indemnity plans and are instead offering managed care plans such as HMOs and PPOs. You may have few or no indemnity plan choices in your area.