Health insurance is also called medical insurance that covers the cost of an individual's medical and surgical expenses. The individual pays a fixed sum (premium), every year for the health cover. Depending on the type of health insurance coverage, either the insured pays costs out-of-pocket and is then reimbursed, or the insurer makes payments directly to the provider.
In health insurance terminology, the "provider" is a clinic, hospital, doctor, laboratory, health care practitioner, or pharmacy. The "insured" is the owner of the health insurance policy; the person with the health insurance coverage.
Below are the types of insurance you should have according to professional insurance adviser:
Preferred Provider Organization (PPO) Health Insurance Plans
A PPO plan is a Preferred Provider Organization. With a PPO plan, you are encouraged to use a network of preferred doctors and hospitals. These providers are contracted to provide service to plan members at a negotiated or discounted rate. You generally are not required to designate a Primary Care physician but will have the choice to see any doctors or specialists within the plans network.
You generally have an annual deductible that you would be required to pay before the insurance company begins covering your medical bills. You may also have a co-payment for certain services or a co-insurance where you are responsible for a percentage of the total charges of your medical expenses.
Health Maintenance Organization (HMO) Health Insurance Plans
An HMO is a Health Maintenance Organization. With an HMO plan, you generally have a lower out-of-pocket expense but also have less flexibility in the choice of physicians or hospitals than other plans. An HMO may require you to choose a primary care physician (PCP). With a PCP, they will take care of most of your health care needs. Generally to see a specialist, you will need to obtain a referral from your PCP.
With an HMO, you generally will have coverage for a broader range of preventative services than you would have through a different plan. You may or may not be required to pay a deductible before your coverage starts. Generally you will have a minimal co-payment. There are generally no claim forms to file on an HMO. The main thing you will want to keep in mind is that with most HMO plans you have no coverage if you go outside of your network without proper authorizations from your Primary Care Physician (PCP) or in cases of certain emergency situations.
Point of Service (POS) Health Insurance Plans
A POS is a Point of Service Plan. POS plans combine features of an HMO and a PPO plan. Just like an HMO, POS plans may require you to choose a Primary Care Physician (PCP) from the plan's network providers. Generally services rendered by the PCP are not subject to the plans deductible.
If you utilize covered services that are rendered or referred by your PCP you may receive the higher level of coverage. If you utilize services by a non-network provider, you may be subject to a deductible and lower level of coverage. You may also have to pay up-front and submit a claim for reimbursement.
Exclusive Provider Organization (EPOs) Health Insurance Plans
An EPO is an Exclusive Provider Organization. EPO plans are similar to HMO plans because they have a network of physicians their members are required to use except in the case of emergency. Members will have a Primary Care Physician (PCP) who will provide referrals to in-network specialists. EPO members are responsible for small co-payments and may require a deductible.
Indemnity Health Insurance Plans
Indemnity health plans are known as Fee-for-Service plans because of pre-determined amounts or percentages of costs paid to the member for covered services. The member may be responsible for deductibles and co-insurance amounts.
In most cases the member will pay first out of pocket and then file a claim to be reimbursed for the covered amount.