Health
Maintenance Organization (HMO)
This is the most controlled type of
health care plan. You must use the HMO's doctors and facilities.
Medical care outside the system is sometimes not covered. While
you may lose some "freedom of choice," you benefit from lower
out-of-pocket costs. HMOs typically have no deductibles or plan
maximums. For each visit, you pay only a small fee ("co-payment"),
or nothing at all.
An HMO can be a good choice if you don't mind the restrictions, if
its facilities are convenient, and if you want to avoid most
out-of-pocket expenses and paperwork.
Point-of-Service Plan (POS)
This plan type functions somewhat
like an HMO, but allows you to choose a different doctor or
hospital each time you need care, if you so desire. To receive the
highest level of benefits, however, you must choose a doctor or
hospital within the network. If you choose a provider outside the
network, you will have to pay higher out-of-pocket costs. In some
cases, you may still be required to select a Primary Care Provider
who helps direct most or all of your care.
Preferred
Provider Organization (PPO)
This is a modern version of the
"traditional" insurance of days past. It is essentially a plan
that contracts with a network of doctors and hospitals that have
agreed to accept a discounted fee for the services they render to
plan participants. When you enroll in a PPO, you can choose any
doctor or hospital on the list of "preferred providers." If you
select a provider who is not on the list, your out-of-pocket
expenses increase. Some PPO plans offer preventive services. These
services are designed to help you maintain your health by
providing lifestyle recommendations and educational materials.
Unlike an HMO, with a PPO plan you will most likely need to pay a
deductible and there are generally plan maximums applied. If you
are looking for freedom in choosing your doctor and hospital, and
are willing to pay some additional costs, a PPO may be right for
you.
