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Health Insurance Plan Types
Both group and individual health insurance can be described in two broad categories - traditional (also called fee-for-service) and managed care. No plan type is necessarily better than the other, the differences exist to better meet your needs or preferences. The major differences concern choice of providers, out-of-pocket costs for covered services and how bills are paid. Some participants desire the broader provider choice and autonomy offered by fee-for-service plans, while others prefer the lower costs and less paperwork normally associated with managed care plans.
Fee-for-Service Plans allow participants to select the doctors, hospitals, and other health care providers they desire, and can refer themselves to a specialist without getting permission from their primary care provider. These plans may involve more out-of-pocket expenses along with more paperwork, and normally a deductible must be met before your insurance company starts paying. These plans are best for participants who desire more freedom in choosing doctors and hospitals (even if it costs more), those who travel extensively, or have insured children who live in different areas than themselves.
Managed Care Plans include ways to manage costs, use, and quality of the health care system. These plans typically involve agreements with certain doctors, hospitals, and health care providers to give a range of services to plan members at reduced cost. In general, you will have less paperwork and lower out-of-pocket costs if you select a managed care type plan.
PPO (Preferred Provider Organization) is a form of managed care which has made arrangements with doctors, hospitals, and other care providers within a "network" to accept lower fees from the insurer for their services. As a result, your cost sharing should be lower than if you go outside the network. In addition to the PPO doctors making referrals, plan members can refer themselves to other doctors, including ones outside the plan.
If you go to a doctor within the PPO network, you will pay a copayment (a set amount you pay for certain servicesısay $10 for a doctor or $5 for a prescription). Your coinsurance amounts will be based on lower charges for PPO members.
If you choose to go outside the network, you will have to meet the deductible and pay coinsurance based on higher charges. In addition, you may have to pay the difference between what the provider charges and what the plan will pay.
Health Savings Account (HSA) is a relatively new type of health insurance where a savings account is established exclusively to pay for qualified medical expenses of eligible participants. An HSA allows you to fund your health care expenses now, save for potential long-term health care expenses or bridge a potential gap between your needs and funds available once you become eligible for Medicare. Money not spent rolls over to the following year, contributions are tax deductible up to the IRS maximum, and interest earned is tax-advantaged.
Our quote engine designates HSA accounts with a piggy bank. 
Health Maintenance Organization (HMO) is the oldest form of managed care plan. HMOs offer members a range of health benefits, including preventive care, for a set monthly fee. There are many kinds of HMOs. If doctors are employees of the health plan and you visit them at central medical offices or clinics, it is a staff or group model HMO. Other HMOs contract with physician groups or individual doctors who have private offices. These are called individual practice associations (IPAs) or networks.
HMOs will give you a list of doctors from which to choose a primary care doctor. This doctor coordinates your care, which means that generally you must contact him or her to be referred to a specialist.
With some HMOs, you will pay nothing when you visit doctors. With other HMOs there may be a copayment, like $5 or $10, for various services.
If you belong to an HMO, the plan only covers the cost of charges for doctors in that HMO. If you go outside the HMO, you will pay the bill. This is not the case with point-of-service plans.
Point-of-Service (POS) Plan. Many HMOs offer an indemnity-type option known as a POS plan. The primary care doctors in a POS plan usually make referrals to other providers in the plan. But in a POS plan, members can refer themselves outside the plan and still get some coverage.
If the doctor makes a referral out of the network, the plan pays all or most of the bill. If you refer yourself to a provider outside the network and the service is covered by the plan, you will have to pay coinsurance. | 
