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There are two basic types of health insurance policies: fee for service, and managed care. Managed care includes Health Maintenance Organization (HMO) policies, Point of Service (POS) policies, and Preferred Provider Organization (PPO) policies. Any policy can be purchased as part of a group plan, or as an individual, and can be offered for long or short term coverage.
Fee-for-service policies are the most common type of health insurance policies. They provide the largest choice of doctors, and cover either basic care, or major medical expenses depending on the subscriber's choice. Subscribers pay a premium in order to get discounted rates on doctor visits and services. There is a deductible that must be met before the policy will cover many expenses, and coinsurance is paid past that deductible. The most common coinsurance amount is 80/20, meaning that the policy covers 80% of the cost, while the subscriber pays the remaining 20%. There is a cap on the total out of pocket spending per year.
Health insurance policies under the title HMO are prepaid plans that cover all basic medical services like office visits, emergency care, laboratory work and therapies. Subscribers usually pay a copay for visits to offices. The choice of doctors and hospitals is limited to ones that are in network, and often the insurance company chooses the doctor for the subscriber. In order to visit a specialist, a referral must be given by the doctor, and the specialist must be in network as well. HMO plans generally cover preventative care, and have low out of pocket costs, and many plans have a deductible for services not covered by the policy.
POS health insurance policies work very much like HMO plans. The primary difference is that doctors who are out of network can be covered. These plans tend to have the lowest copayments, and low to no deductible. The premiums are the highest of the policies, as subscribers are paying for the luxury of choice, and the ability to have the most services covered.
A PPO is a combination of fee for service and HMO policies. There are limited doctors in the network, but the subscriber can choose which doctor they want from a list. Out-of-network doctors are covered, but the subscriber has to pay a larger fee for them than those that are in-network. Sometimes there is a deductible and coinsurance. Many fees are paid up front, and are reimbursed at a later date, either by the sponsoring employer, or by the insurance company. These types of health insurance policies have a greater amount of paperwork than others, because of this reimbursement procedure.
@rugbygirl - What happened to your friend is tragic! I'm so sorry.
I think the ideal situation is for people to be able to choose the best health insurance policies for their own needs. I actually chose an HMO at my last job even though it had the highest premium of the three choices - because I wanted *financial* security. I wanted to know that that monthly fee was pretty much all I would have to pay. The POS and PPO plans I could choose from had much higher out-of-pocket maximums as well as more copays.
But I read the fine print. My plan did cover emergency care out of the area and there was some limited ability to change your primary care doctor if s/he was just a bad fit for you.
Personally, when I compare health insurance policies, I feel more secure with a POS or PPO if I have a choice. That way, you have more control and are never stuck with a "bad" doctor; you are also less likely to get socked with a huge bill if you are travelling and need to see a doctor out of the area.
An acquaintance of mine had an HMO and an assigned doctor. He kept insisting that she had "a virus" and refused to refer her to a specialist. Then it was an ulcer. Finally, after a year of this, she was sent in for ulcer surgery - and turned out to be dying of esophageal cancer. Now, nothing could have
have been done for her, but she could have had a lot longer to say her goodbyes if she had known sooner.
I don't blame the insurance company exactly - I blame the bad doctor. But things could have turned out differently if she had had the ability to choose a new doctor.
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