Types of Plans

The following general descriptions may vary from your coverage, so always check your own plan description.

Health Maintenance Organizations

Health maintenance organizations (HMOs) provide plan members with lower costs and coordinated care from a specific list of health care providers, hospitals, and pharmacies. You must use these specific providers in order for your medical care to be covered by the plan. Plan members choose a primary care physician and must get a referral from the primary care physician to see a specialist. 

Preferred Provider Organizations

Preferred provider organizations (PPOs) provide plan members with additional choices in providers, hospitals, and pharmacies. You pay a standard co-pay amount for an office visit. You can choose between an in-plan or non-plan provider, instead of being restricted to designated providers. You can go to a specialist without permission from your primary care physician as long as the specialist is part of your PPO network. A network specialist would be the least expensive choice. If you visit an out-of-network specialist, you may have to pay the entire bill first, then submit a claim for reimbursement. You may have a deductible for out-of-network medical services or you may have to pay the difference between what network doctors charge and what out-of-network doctors charge.

Point-of-Service Plans

Point-of-service (POS) plans blend the features of HMO and PPO plans. Plan participants can choose the type of provider best suited to their needs each time they seek care. This type of plan lets you obtain care from an in-network provider (HMO) and, at the next "point of service," see a provider who is from the larger network (PPO), but pay more for your medical expenses. With a POS plan, you would usually see your chosen primary care physician first for any medical issues. Your physician would refer you to a specialist if you need one. You could visit a health care provider outside your network and still receive coverage — but substantially less coverage than if you had stayed within the network.

Exclusive Provider Organizations

Exclusive Provider Organizations (EPOs) are similar to PPO plans in that they provide plan members with reduced costs and members pay a co-pay amount for an office visit. However, members must select providers from a limited list. If the plan member visits an out-of-network doctor, the visit may cost the plan member from 20 to 100 percent of the costs. This plan may be difficult for patients who require a number of unique specialists.

Fee-for-Service

Fee-for-Service (FFS) plans are more flexible, but involve higher premiums and out-of-pocket expenses, as well as more paperwork. Plan members can choose their own doctors and hospitals. Members may visit a specialist without a referral from a primary care doctor. There is usually a deductible that must be met before the insurance company starts paying claims. Doctors are then reimbursed a percentage of the bill (typically 80 percent); members must pay the remaining 20 percent. Members of an FFS plan may have to pay for medical services up front and then submit a claim for reimbursement. FFS plans pay for “reasonable and customary” medical expenses (a reasonable and customary fee is the amount that your healthcare plan determines is the normal range of payment for a specific health-related service or medical procedure within a given geographic area). If a doctor charges more than the average, the plan member must pay the difference.

Ask family or friends to help you manage the maze of health insurance claims, keep organized records and file appeals if needed. Putting a trusted relative or friend in charge of insurance can take an enormous burden off you.

Read your health insurance policy carefully to understand the medical expenses you're responsible for paying, such as premiums, deductibles, co-payments and co-insurance.