Understanding Health Care Plans: HMO, PPO, POS – Explained by your Local Waterford, Michigan Health Insurance Agent

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The cost of health insurance has gone up significantly over the last decade, making it difficult if not impossible for smaller businesses to provide health care plans for employees.  There are several types of health plans available, including HMO's, PPO's and POS plans.  Some larger companies are able to offer their employees a choice of health plans or insurers where smaller companies are only able to offer one. 

Here is an overview of the common types of health care plans: 

HMO - Health Maintenance Organization 

HMO's are generally the least expensive health care plan, but they are also the least flexible, requiring you to visit only those doctors who are in your HMO network.   With these plans, you elect a primary care physician who is a part of the network.  The primary care physician is your main health care provider and he has to give you a referral in order for you to see a specialist when necessary.   This type of coverage requires a monthly premium and a co-pay of $5 - $10 for each doctor visit.  

Prescription coverage varies and the percentage of prescription cost covered by the HMO is decided upon by the employer.  The amount paid by the employee can be anywhere from a $5 co-pay on some drugs to a larger co-pay of almost the entire amount for others.  It all depends on the plan that is worked out by the employer. 

An HMO cannot require referrals for emergency care.  They are required by law to cover emergency room visits; this is the only care they will cover without a referral from your primary care physician. 

PPO - Preferred Provider Organization  

A PPO is a more flexible plan than an HMO, allowing you to choose the doctor your visit.  They do not require a referral from your primary care physician to visit a specialist, but the premium is generally higher for this type of plan.  If you should visit a physician outside your network, you might have to pay for the treatment and file a claim with the PPO insurance provider for a partial reimbursement, generally up to 80%. 

POS - Point of Service Plan 

The characteristics of this type of plan are a blend of the HMO and PPO plans.  You will be required to choose a primary care provider from the associated network.  If you should visit a doctor outside of the network, you may be required to pay for the treatment yourself, unless you are referred by your primary care physician.  In this case, the health plan will pay.  

The insurance plan offered by an employer depends on the size of the company and the number of employees they have.  The cost and flexibility of the plans vary.  Usually the most flexible plan comes with a higher premium.  If you have recently changed jobs and have new insurance coverage, you may end up having to change doctors if your doctor is not within the network of physicians who can accept your insurance. 

This article was written by Ted Lewicki, a Farmers Insurance Agent who represents several insurance companies.  Ted has been in the insurance business for nearly 50 years; he has been a member of the Better Business Bureau with no reported complaints.  He is always available when his customers have questions or concerns or they need to review their insurance coverage. services Oakland County, Michigan with many clients in Waterford, Pontiac, Rochester, Auburn Hills, West Bloomfield, Keego Harbor, Milford, White Lake, Walled Lake, Wixom and neighboring cities and communities. 



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