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Mar
15

Health Plan Types


Consultation by phoneWith the landscape of health insurance ever-changing, now more than ever, it is becoming more important that consumers know everything about their health coverage options. If you have been covered under an employer health plan, you will be familiar with some of the most popular types of heath insurance plans available. In addition to those options offered through your employer’s plan, there are several types of popular insurance plans available in the market that may fit your needs.

If you do not have access to an employer’s plan, it may be even more important that you know your health insurance plan options the 2014 Affordable Health Care mandates get closer.

Learning the basics of the following 5 types of insurance plans is a good place to start as you consider the kind of health coverage you and your family require.

Health Maintenance Organization (HMO)

HMO is one of the most common health insurance plan types used since it is most offered by US employers. In a HMO policy, members are given access to a network of doctors and hospitals through a primary care physician (PCP) or gatekeeper selected by the insured. This PCP is the first point of contact for health needs and gives referrals, when needed, in the plan’s network. The plan features low deductibles and co-payments and provides the highest level of coverage out of all the health insurance plan types available. Although these plans often include health, dental and vision coverage, the plan is considered the most restrictive since service outside of the network may not be covered at all.

Preferred Provider Organization (PPO)

PPO health insurance plans also provide a network of doctors, specialists and hospitals, but do not require members to choose a PCP. Additionally, referrals to specialists may not be necessary. Premiums and deductibles in this plan are higher than that of a HMO, with the exception of preventative care services which are not subject to the deductible. Certain out-of-network services may be covered by a PPO plan, but will be accompanied by higher deductibles and co-payments.

Point of Service (POS)

A hybrid of HMO and PPO plan types, the POS plan does have a network requiring a primary care physician and allows out-of-network visits. Out-of-network visits require more work on the part of the member as paperwork and receipt submission is handled by the individual.

There are typically smaller deductibles and limited co-payments for most care as compared to PPO plans. Members of a POS essentially make a trade-off: lower medical costs in exchange for less choice.

Fee for Service (FFS)

FFS plans provide members with a structure where fees are paid for each service received. The plan is the least restrictive plan type since the member has a choice of health care provider and facility. Because services are unbundled, this plan type has been problematic as doctors historically treat patients having a FFS plan with more services than those with other plan types.

Members typically pay 20% out-of-pocket for every service towards a preset deductible. The contract will specify the maximum amount to be paid by the insured.

Consumer Directed Health Plan (CDHP)

CDHPs have lower premiums because of their higher deductibles. Typically the deductible applies to services that are not considered to be preventative.

Depending on the plan setup, a member may or may not have to choose a PCP for services. Enrolling in this plan type makes a member eligible for a tax advantaged account like a Health Savings Account (HSA) and allows the member to better control amounts spent on health care.

This plan type is becoming more popular as employers look to find ways to lower health insurance costs paid on behalf of employees.

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