Health Insurance

Health Insurance Schemes

These days, the rising costs of health care make health insurance coverage a necessity. For most people, insurance is a huge component to planning their finances. The latest trends suggest that HMO insurance plans are down by 6% and indemnity and PPO plans are on the increase.

There are four major types of medical insurance available to meet the different healthcare needs of individuals and families. These include indemnity (Fee-for-Service), PPO (Preferred Provider Organization), POS (Point-of-Service Plan), and HMO (Health Maintenance Organization).

Take a look at the following table for a quick, general comparison of the different types of health insurance:

Indemnity PPO POS HMO
More Expensive <——– ———-> Less Expensive
More Freedom of Choice <——– ———-> Limited Freedom of Choice

1. Indemnity (Fee-for-Service)

Generally, fee-for-service insurance is more expensive. However, what you pay in higher premiums (monthly payments) gives you the freedom of choosing your own healthcare providers. Indemnity policies have an out-of-pocket maximum, in other words, after your expenses reach a certain limit in a particular year, your health insurance provider will pay for all remaining family and individual health care services that are specified in your health insurance policy.

2. PPO (Preferred Provider Organization)

A PPO plan gives you two healthcare options for healthcare services. You may choose your own doctor whereby you must pay higher co-payment charges and meet the deductible, or, you may stay within the network of providers and pay a co-payment based on lower charges for PPO members.

3. POS (Point of Service)

A POS healthcare plan gives you more freedom than a strict HMO but is also more expensive. You will have a primary care physician (PCP) that usually makes the referrals for other medical services in the policy. You also have the option to refer yourself outside the insurance policy and continue to receive restricted coverage.

4. HMO (Health Maintenance Organization)

HMOs are the least expensive option but also have the most restricted access to healthcare. For a set monthly fee, HMOs offer a range of healthcare benefits, including preventive care. Insurance plans only cover the cost of doctors in the HMO network. When visiting a doctor outside of the HMO network, you will have to pay the bill in full.