Types of Health Insurance Policies

Here’s an easy rule-of-thumb: Plans with the most comprehensive coverage at the lowest out-of-pocket cost require you to use a specified network of hospitals, doctors, labs, and other providers. The more flexibility you want, the more you’ll pay, in either premiums or co-payments.

Here are some of the Major Types of Health Insurance Policies:

Health Maintenance Organizations (HMO) - An HMO provides managed care. You choose a primary care provider. You get referrals to see specialists. Your HMO may only pay for treatment only provided by doctors and hospitals who belong to the HMO network.

Preferred Provider Organizations (PPO) - These usually have fewer restrictions but higher premiums. You will usually receive a list of preferred providers, if you want to get treatment somewhere else, the PPO usually pays a portion of the cost.

Major Medical Insurance - provides coverage for most types of medical treatment, some of these plans have a deductible. Restrictions are fewer than with an HMO or a PPO so they usually have higher premiums.

Point-of-Service (POS) Plans - you choose a primary care provider and must get a referral from your primary care provider to see a specialist. If you see a specialist in the POS network, you pay no deductible and only a small copayment. If you see a physician outside the network the plan will pay only part of the expense. A PSO has fewer restrictions than an HMO, but not as much flexibility as a PPO.