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What are the different types of Health insurance?


Choosing the right health insurance can be one of the most important financial decisions that an individual will make.  The effect of not having insurance or choosing the wrong type of coverage can have life altering health and financial consequences.  That is why it is crucial for individuals to have an understanding about the different types of health insurance plans. There are two types of health insurance plans Fee for Service Plans and Managed Care Plans.


Fee for Service Plans

Fee for service plans allows individuals to select almost any certified medical provider that they want. That service provider can charge a fee for each medical procedure that they provide. Once you pay the annual deductible, the insurer pays a percentage generally 80%, while you make a copayment of 20%.


Managed Care Plans

There are three types of Managed Care plans, HMO’s, PPO’s and POS’s. The vast majority of Americans are enrolled in managed care plans because they are more affordable than Fee for Service Plans.


Health Maintenance Organization

In a Health Maintenance Organization (HMO) plan, you the insured pay a fixed cost for your medical expenses. Once you enroll in an HMO you are assigned a doctor that is selected by the HMO. The HMO will then provide for all your medical needs, and you will only be required to pay a small deductible.


Preferred Provider Organization

In a Preferred Provider Organization (PPO) plan you are not assigned a specific provider, but if you use a provider that is in the PPO’s network you will receive a discount. PPO’s members are generally required to pay a small copayment ($20 to $30) for doctor visits. Many government and union plans are PPO’s.


Point of Service (POS)

A Point of Service Plan (POS) is a hybrid of HMO and PPO plans. Like in HMO, you will be assigned a provider within the organizations network. However like a PPO you can go to a doctor that is outside of the network, but if you do your share of the bill will be higher.

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