Popular Medical Plans Explained

If you have to purchase health insurance, for yourself and your family

, you may have trouble understanding all of the health insurance related terms. I have tried to explain the basics of the most common kinds of medical plans so you can figure out which plan will be best for you.

It might be simplest to begin by describing the difference between network and non-network medical plans. Network members have agreed to follow the organization rules. The network organization uses these rules to keep medical costs lower. The network should also make it fast and easy to get bills paid and claims handled. The networks are established to try and control medical expenses and simplify access.

PPO, HMO, and POS medical plans use a network of medical providers. With an HMO plan, you must almost always visit a network provider in order to get covered at all. With a PPO or POS plan, you enjoy the best coverage if you use a network medical service. You can still be covered, just at a lower coverage level, if you chose to find an out of network medical provider. All three of these plans may help you control your medical costs. An HMO plan is the most restrictive. POS and PPO plans give you more choices. You are likely to be happy with any one of these kinds of plans if your favorite doctors, hospitals, and drug stores are in the network. If you have to use non-network providers a lot, it can cost you a lot more.

There may be a few, rare exceptions to the network coverage rules. Most of them will provide coverage for emergencies. If you think you can claim an exception in a non-emergency situation, always get it approved before you actually visit the doctor.

Most of the time, network plans are also very simple to use. You usually just have to pay a co-payment or discounted price. The medical office will handle claims for you.

Indemnity plans do not rely upon any sort of network. However, you still need to make sure that the provider accepts the insurance you have. Sometimes, patients even have to send in their own claims form. This makes it harder to use the plan. Since there is no network to control costs, you may also have higher out of pocket costs. Indemnity health insurance plans may allow their members the most flexibility and freedom.

Which type of medical plan will be better for your family? That decision really depends upon how you like to get medical services, where you live, and the network plans in your area. It should be pretty easy to shop around for different medical plans in your local area.

by: Marilyn Katz

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