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 an HMO, you'll 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'll 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, you typically won't have to submit any of your own claims to the insurance company. However, keep in mind that you will likely have no coverage whatsoever for services rendered by non-network providers, or for services rendered without a proper referral from your PCPBack to TopHow does a PPO plan work?
As a member of a PPO (Preferred Provider Organization) plan, you will be encouraged to use the insurance company's network of preferred 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 covering your medical bills. You may also have a co-payment for certain services or be required to cover a certain percentage 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 by a network physician.Back to TopHow does a POS plan work?
A POS (Point of Service) plan combines some of the features offered by HMO and PPO plans. As with an HMO, members of a POS plan are required to choose a primary care physician (PCP) from the plan's network of providers. Services rendered by your PCP are typically not subject to a deductible. Also, like HMOs, POS plans typically offer coverage for preventive care visits.
Typically, however, you will only receive a higher level of coverage for services rendered or referred by your PCP. Services rendered by a non-network provider may be subject to a deductible and will likely be covered at a lower level. If services are rendered outside of the network, you'll likely have to pay up-front and submit a claim to the insurance company yourself.Back to TopWhat is a co-payment?
A "co-payment" or "co-pay" is a specific charge that your health insurance plan may require that you pay for a specific medical service or supply. For example, your health insurance plan may require a $15 co-payment for an office visit or brand-name prescription drug, after which the insurance company often pays the remainder of the charges.
Back to TopWhat is a deductible?A "deductible" is a specific dollar amount that your health insurance company may require that you pay out-of-pocket each year before your health insurance plan begins to make payments for claims. Not all health insurance plans require a deductible. As a general rule (though there are many exceptions), HMO plans typically do not require a deductible, while most Indemnity and PPO plans do.Back to TopWhat is coinsurance?Coinsurance is the term used by health insurance companies to refer to the amount that you are required to pay for a medical claim, apart from any co-payments or deductible. For example, if your health insurance plan has a 20% coinsurance requirement (and does not have any additional co-payment or deductible requirements), then a $100 medical bill would cost you $20, and the insurance company would pay the remaining $80.Back to Top