Frequently Asked Questions
What are your health insurance choices?
There are many different types of health insurance. Each has pros and cons. There is no “best”plan. Choosing a health insurance plan is like making any other major purchase: you choose the
plan that meets both your needs and your budget. Cost isn’t the only thing to consider when buying
health insurance. You also need to consider what benefits are covered. You need to compare
plans carefully for both cost and coverage.
Although there are many names for health insurance plans, the information here groups them as
three main types:
- Fee-for-Service (or Traditional Health Insurance) Health Maintenance Organizations (or HMOs)Preferred Provider Organizations (or PPOs)Fee-For-Service
This is a traditional kind of health care policy. Insurance companies pay fees for the services
provided to the insured people covered by the policy. This type of health insurance offers the
most choices of doctors and hospitals. You can choose any doctor you wish and change doctors
at any time. You can go to any hospital in any part of the country.
With fee-for-service, the insurer only pays for part of your doctor and hospital bills. This is what
you pay:
- A monthly fee, called a premium
- A certain amount of money each year, known as the deductible, before the insurance payments begin
- After you have paid your deductible amount for the year, you share the bill with the insurance company. Your portion is called coinsurance
Health maintenance organizations are prepaid health plans. As an HMO member, you pay a
monthly premium. In exchange, the HMO provides comprehensive care for you and your family
including doctors’ visits, hospital stays, emergency care, surgery, lab tests, x-rays, and therapy.
The HMO arranges for this care either directly in its own group practice and/or through doctors
and other health care professionals under contract. Usually, your choices of doctors and hospitals
are limited to those that have agreements with the HMO to provide care.
Preferred Provider Organizations (PPO)
The preferred provider organization is a combination of traditional fee-for-service and an HMO.
Like an HMO, there are a limited number of doctors and hospitals to choose from. When you
use these providers (sometimes called “network” providers), most of your medical bills are covered.
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