Types of Health Insurance

There are 3 main types of health insurance plans: HMO, PPO and POS.

Health Maintenance Organization (HMO)
HMO is usually the cheapest health insurance plan and the least flexible. People pay a monthly premium that helps cover various medical services such as preventive care, medical treatment and parts of doctor visit costs. Most plans have a co-pay of $5 to $20 for each appointment to help deter people from showing up at the doctor's office for every little thing. No out of network doctor visits are covered in a HMO plan.

The HMO plan works by requring a patient to select a primary care physician (PCP), basically the only doctor you can see without a referral. Anytime you feel you must see a specialist, the PCP must refer you to the specalist or else the visit will not be covered.

A lot of employers' HMO plan also cover prescription drugs although there is usually a co-pay in the form of $5 to $10 is required of non-brand drugs. For certain drugs, a patient is almost forced to pay the entire cost of the drug.

Preferred Provider Organization (PPO)
This plan is very similiar to the HMO plan with the exception that it allows you to go to any doctor you prefer, not just limited to a network. This does mean higher higher health insurance premium. Using the insurance company's network of doctor does mean more coverage than if you go out of network. When you go out of network, you need to first pay for any medical costs and then submitting a form for reimbursement.

Point of Service Plan (POS)
POS plans are almost a mixed hybrid of HMO and PPO plans. Similiar to a HMO plan, you choose an in-network physician to be your primary care provider. However, like a Preferred Provider Organization plan, a POS plan allows you to go out of your network. However, keep in mind when you go on your own without a referral from your primary doctor that you have designated, you'll end up paying most of the cost. If you do get a referral, the health insurance plan will pick up the some of the bill.