A health insurance plan is a contract between an individual and an insurance company that aims at covering the individual’s medical expenses. The companies pay for surgical, medical, dental, and prescriptions. Individuals can buy their own insurance plans or rely on their employers for coverage. Other insurances are provided via public programs.
There are many types of medical expense coverage. Each plan has policies that clients must follow in order to benefit. Choosing the right insurance plan can be challenging because of the policies stipulated. This article focuses on 5 common insurance plans and their policies. It also helps individuals to evaluate and choose the most suitable plans.
1. Preferred Provider Organisation (PPO)
It is a group health coverage plan. Employees using PPO are encouraged to use selected networks of doctors and hospitals. The insurance company contracted to provide health care services to members at a discounted fee. Annual deductions are made to the employees pay by the insurer before covering any medical expenses. A PPO plan is the best because it allows flexibility in choosing preferred doctors. It also offers quality plans at lower premiums.
2. Health Maintenance Organization (HMO)
It is also under the group health insurance policy. An HMO policy is a cheaper plan for employees and limits the choice of doctors and hospitals they can choose from. Under this policy, employees may be requested to acquire a Primary Care Physician.
One advantage of HMOs is that they offer many preventive services compared to other policies. Also, they offer coverage without necessarily relying on prior annual deductions. Their premiums are also affordable. However, employees will only be able to get services under specific networks. Going outside the network will be under an individual’s budget.
3. Point of Service Plan (POS)
POS is a group medical expense coverage plan that encompasses HMO and PPO features. Employees covered under POS may be required to select a Primary Care Physician from the insurer’s group of service providers. POS is ideal because it gives employees the freedom to choose preferred healthcare service providers.
4. Exclusive Provider Organization Plan (EPO)
Just like HMOs, EPOs also allow their members to use a selected network of hospitals except for emergencies. The members have a Primary Care Physician who refers them to the insurer’s specialists.
5. Indemnity Health Insurance Plans
This type of plan is a fee-for-service plan because of the predetermined amounts payable to the member for medical coverage. Members pay first to the indemnity health insurers before filing a claim for the covered amount. The plan is good for members who seek high flexibility choices for hospitals.
There are a number of plans to choose from for medical expense coverage. The plans can be categorized into group and individual plans. Some plans offer flexibility in choosing physicians and hospitals. Others have their preferred hospitals and physicians. What differentiates one policy from the other is the premiums. Health insurance service providers also limit their services, as shown under the policy. Individuals should seek adequate advice before settling for a health insurance plan.