Understanding The Differenct Types Of Health Insurance

Navigating the world of health insurance is not easy. All of the terms and conditions of a typical health insurance policy are difficult to understand. The first step towards understanding your health insurance is knowing what type you have.

Fee-for-service plans are one type you may have. In this type of program, your insurance provider will pay part of your medical bills. You pay a premium each month, and you have a deductible that you must pay for out of your own pocket before the insurance kicks in. The deductible can be quite high or quite low, depending on the policy's terms. Typically, the higher the deductible, the lower your premium amount. Once your deductible has been met, your insurance will pay a portion, such as 80 percent, or all of your medical expenses.

A health maintenance organization, or HMO, is another type of insurance that you pay for on a monthly basis. Then, you receive comprehensive care for all of your medical needs, as outlined in the policy. However, you will be restricted as to the doctors and medical facilities you can use. You can only use those that have agreed to work with the HMO. You will probably be required to pay a co-pay when you visit the doctor. You may have to wait a while to get an appointment when you have an HMO, because the doctors in the plan are paid regardless of the number of patients they see, so they are not motivated to get patients in quickly for minor complaints.

The third common type of insurance plan is a preferred provider organization, or PPO. This combines the features of a fee-for-service plan and an HMO. Like the fee-for-service plan, you will have a deductible, and the insurance will pay a portion of your medical care after the deductible has been met. Like an HMO, you will have to choose an in-network doctor to get the most benefit from the plan. You can choose an out-of-network doctor or provider, but you will pay more for your care. PPOs vary tremendously from plan to plan. Some cover preventative care, and others are used primarily for major medical expenses.

There are other variations on these three main types of insurance. Before you sign up for a policy, be sure that you ask your agent all of your health insurance questions . You need to know exactly what it is that you are receiving with your new insurance policy before you buy it!