Making Sense of Health Plans

(MS) - When it comes to health plans, confusion often reigns supreme. Most people realize there are differences, some subtle and some substantial, involved in all of that alphabet soup. There are essentially five categories of health plans, and there are even differences in plans that fall under the same category. Here's a quick rundown of the major categories of health plans.

• Health Maintenance Organization (HMO): HMOs are one of the more complex plans, as there are many different types. In general, health care expenses are only covered by an HMO if a patient goes to a provider within their organization. However, there are exceptions, such as emergencies when traveling. HMOs may or may not require the selection of a primary care physician, who will then coordinate a patient's care. Seeing a specialist generally requires a primary care physician's approval, and the HMO must grant approval before a hospital stay (unless in the case of an emergency).

• Preferred Provider Organization (PPO): PPOs are typically more flexible than HMOs, but that flexibility comes with a price. Patients can see any physician or specialist they want, but if the medical professional seen does not have a contract with the health plan (i.e., not a "preferred provider"), the co-payment will be higher. Like HMOs, PPOs typically require patients get their approval before a hospital stay.

• Point of Service (POS): A POS is essentially a combination of an HMO and PPO. In a POS plan, a patient can see a physician within the plan and simply pay a small co-payment. It's also possible to see a physician outside of the plan, but after paying the initial deductible, patients will be expected to pay a percentage of the remaining charge. Under a POS, it's often typical that certain, more complex services (i.e., transplant operations, mental health services) are only covered when patients see physicians within the POS.

• Exclusive Provider Organization (EPO): An EPO is essentially a much smaller PPO - one that offers a very small amount of healthcare providers. Providers within an EPO typically offer reduced rates, as they often see more patients. Once an EPO provider is selected, the primary care physician selected will direct a patient's care, making an EPO similar to an HMO as well. Unlike a PPO, an EPO will only reimburse patients for services rendered by physicians within the network.

• Indemnity Plans: Indemnity plans are the traditional form of health insurance. No restrictions are placed on physicians or hospitals or providers. Indemnity plans typically cover a specific percentage of expenses after the deductible has been paid. Patients are responsible for paying the rest. TF082422