There are many kinds of health insurance companies and plans: PPOs, POS, HMOs, and Fee For Service. There are several firms that propose diverse levels of insurance coverage, distinct degrees of flexibility about the physicians and the clinics that an individual can use. People ought not to feel overwhelmed or daunted by all this because by doing a little bit of research, they will be able to easily figure out the distinctions that exist between the plans that health insurance companies offer. In this article, we will discuss about the different types of health insurance companies. More specifically, we will discuss about the health maintenance organizations and the preferred provider organizations.
Health insurance companies share the identical fundamental idea: they charge a fee either on a monthly basis or on annual one, and in return, they cover a portion of the health care costs that are incurred by their patients. Health insurance companies are often required to find a way to supply coverage that is sufficiently affordable so that a meaningful number of people be able to become members, without the health insurance firm losing money in the process. Health insurance companies have a different way to approach this dilemma, which impacts the options that a person will have.
A network can be defined as the clinics, the physicians, and the health care suppliers that have a contract with a health insurance company. A deductible can be defined as the amount of money that a patient will be required to settle before their medical coverage begins. For instance, if the individual has a deductible of five hundred dollars and the health costs incurred are over nine thousand dollars, then the patient will only pay five hundred dollars out of their pocket as the health insurance company will cover the rest. A co-pay can be defined as the amount of money that a patient needs to pay for each service that they receive. For instance, when going to see a doctor for a general check-up, the person may be asked to pay ten dollars, and the medical insurance company pays for the rest.
HMO refers to Health Maintenance Organization. HMOs attempt to pay both clinics and health care suppliers as little money as possible in order to supply cheap coverage. In order to do this, HMOs bargain with clinics and health care suppliers to develop contracts that outline specific amounts that the health maintenance organization will have to settle for particular services. In exchange, the clinic or the health care supplier gets more patients. Because of this, individuals who are insured by an HMO must be treated within the network of that health maintenance organization. HMOs typically charge co-pays rather than deductibles and impose their patients to have a primary care physician who may then refer to specialists, if needed.
A PPO refers to Preferred Provider Organization is quite identical to an HMO from the point of view of the principle. Nevertheless, as the name suggests, the selection of a treatment offered in the network of the PPO is preferred but not mandatory. This distinction is what allows preferred provider organizations to supply more flexibility. Yet, individuals need to be aware that if they become members of a PPO and receive medical treatment outside the PPO’s network, then both their deductible and co-pays will be much greater than if they were treated inside the network. This is done purposely in order to reduce the extra cost of the preferred provider organization in covering the care with a supplier that does not have a contract with the PPO. Preferred Provider Organizations also propose more flexibility by not imposing the choice of a primary care physician to their patients.
