Health Insurance Types. This is a big one. It has been a political football for a few years now, due to the inclusion of certain features such as pre-existing conditions, maternity, and inclusion of children living in the household up to age 26. And I have to admit I am pretty opinionated on this one, but it is too long a conversation. I will stick to the overview.
Health insurance comes in two basic flavors. HMO and PPO. Here is the essence:
HMO (Health Maintenance Organization):
This one is very popular with many people because it takes a lot of the decision-making out of their hands, and let’s face it, most people are not medical savvy. You choose a medical group that has a number of doctors affiliated with it. They may have a pediatrician, a gynecologist, a general medical doctor, and maybe some others. They may all be in a single medical group building, or they may have their own offices. There are also Hospitals associated with the group.
How does HMO work?
Let’s say Gladiators insurance company takes in premium, gives a portion to the medical group that you have selected and does all of the medical billing and tracking. The medical group gets a monthly premium for being there for you. When you need a doctor, you call the group and they put you in touch with the primary physician, who is called the “gatekeeper.” That doctor will probably see you first and then decide if you will go to a specialist, and if there is no specialist in the group, the gatekeeper will decide if the group will pay for an outside specialist or a second opinion. They pay out of their pocket for that.
Your job is to find a group that has the doctor or doctors that you like and the hospital that you like. Then you sign up with that group under the Gladiators insurance company you have chosen. An HMO gets paid when you don’t come in to see them. When you do come in to see them, you are now using their time and money. Now you are seeing my bias.
PPO (Preferred Provider Organization):
This is a different type of medical care. They only get paid when you come in to see them. There is no gatekeeper.
How does PPO work?
You go to the doctor of your choice in the “network.” That doctor will be affiliated with a particular hospital or hospitals, so there are some choices there for you.
If you do go to a provider in the PPO network, there will be some costs. There will be a deductible, which has to be met before the company pays out. There is a sharing percentage, (maybe you will pay 20% of the cost of a visit or hospital stay) and an out of pocket maximum. It depends on the program you purchase.
There is no doubt that this is a more expensive type of program, however, you get to choose your doctor, your specialist, your second opinion and your hospital, and you get to pay more for a PPO than an HMO. But you have choices. You can even go out of network, but there is a different fee schedule for that, and it will cost you more out of pocket.
There is another option called an EPO (exclusive provider network,) which does not allow you to go outside the network at all— they won’t pay for any of it. You may, however, like the doctors in the network, so it does not matter. So, one type gets paid until you come in, and the other gets paid only when you come in. Your choice.