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Preferred Provider Organizations (PPO)
You receive discounted rates if you use doctors from a pre-selected group. If
you use a physician outside the PPO plan, you must pay more for the medical care. Deductibles can range from $250 to
$10,000 per calendar year with coinsurance of 50%, 70% 80% or 90%. Once the Out of Pocket maximum is met plans pay 100% of
covered expenses up to the contract limit of liability which can range from $2 - $8 million for the lifetime of the contract.
Health Maintenance Organization (HMO)
Health Maintenance
Organizations usually do not have calendar year deductibles and have fixed copayments for most covered services. Services
are provided by physicians who are employed by, or under contract with, the HMO. HMOs vary in design. Depending on the type
of the HMO, members may be required to obtain a referral from their Primary Care Physician (PCP) in order to visit a network
specialist. Typically, out of network benefits are only covered for emergency medical services.
Indemnity Health Plan
Indemnity health insurance
plans are also called "fee-for-service." These are the types of plans that primarily existed before the rise of
HMOs and PPOs. With indemnity plans, the individual pays a pre-determined percentage of the cost of health care services,
and the insurance company pays the other percentage. For example, an individual might pay 20 percent for services and
the insurance company pays 80 percent. The fees for services are defined by the providers and vary from physician to physician.
Indemnity health plans offer individuals the freedom to choose regarding physicians and hospitals.
Point-of-service plan (POS)
POS plans
are almost a hybrid of HMO and PPO plans. Like an HMO, you designate an in-network physician to be your primary care provider.
However, like a PPO, a POS plan lets you go out-of-network. But when you go on your own, you'll have to pay most of the
cost, unless your primary care physician refers you to an out-of-network doctor. Then, the health plan will pick up the tab.
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