Medical Insurance
Traditional Indemnity
Preferred Provider Organization (PPO)
Health Mantenance Organization (HMO)
Point of Service (POS)
Medicare/Medicaid/Medigap
Traditional Indemnity
Each year you pay 100% of covered types of expenses up to a certain dollar amount limit, this is called the deductible. After you've spent this amount you split additional costs with the insurance company (called co-insurance), again up to a certain maximum amount, called the stop-loss. After you've paid the maximum deductible and co-insurance amount the insurer pays 100% of covered expenses for the rest of the year. For instance: each year you pay the first $500 in expenses (deductible) and then you pay 20% (co-insurance) of the next $5,000 (stop-loss) of expenses for a total out of pocket maximum for covered expense of $1,500. Any covered expense during the remainder of the year in excess of $5,500 is paid 100% by the insurer. You can use any health care provider.
This plan is good for people who travel a lot and/or are willing to pay a higher premium than other forms of medical insurance for the ability to use any provider they want.
Preferred Provider Organization (PPO)
Like a traditional plan you have a yearly deductible and coinsurance maximum you might have to pay. However, the coinsurance amount you pay will vary by whether you use providers in a designated network (preferred providers) or not. You pay a higher coinsurance amount when after meeting the deductible you use non-network providers. When you use a network provider you pay a lower coinsurance and pay a fixed dollar amount (co-pay) for the cost of the office visit instead of the full charge. Everything else works the same as a traditional plan.
Good for people who want to retain choice of provider, can afford to pay more if they use non-network providers and want to pay a lower premium than a traditional plan.
Health Maintenance Organizations (HMO)
You pay a fixed dollar amount (co-pay) for each type of service you get and the insurer pays the balance of the costs. Usually there is a maximum amount in co-pays you pay each year. You must use providers in a specific network. If you do not you pay all of the costs for care. The usual non-network coverage is only for emergency (life-threatening) care or urgent (not life threatening but needs immediate attention, i.e.: a cut that requires stitches to stop bleeding) care. Also, you usually must choose a primary care physician (PCP) who you must see first for any care. If the PCP can't give you the proper care the PCP must give you a referral to another provider in order for the plan to pay for your care.
This plan is good for people who don't travel a lot and want to pay a lower premium in exchange for working with a high level of managed care.
Point of Service (POS)
Typically there are three levels of coverage. The first works like an HMO with you having a PCP and getting referrals to other network providers. You have an office co-pay, never a deductible and low coinsurance amounts. The second level is where you self-refer within the provider network. Here you'll have to pay a deductible and low level of coinsurance. The third level involves using non-network providers and has a deductible and higher level of coinsurance, along with certain types of care not covered, such as, preventative check-ups.
Note: Premiums are slightly higher than an HMO but, lower than a PPO.
Medicaid/Medicare/Medicare Supplements (Medigap)
See section on Government Programs.
