Health insurance comes in many varieties, and comparing them can be tough. However, the variety of plans are often variations of four major types of programs: Health Maintenance Organizations (HMO), Point of Service (POS) Plans, Preferred Provider Organizations (PPO) and Traditional (Indemnity) Plans.

Health Maintenance Organizations

HMOs are a type of managed care plan. Members of HMOs choose a primary care physician (PCP) who will coordinate their routine medical care and provide treatment for a variety of conditions. Often, appointments with specialists must be authorized by the referring PCP and hospital admissions (with the exception of emergency visits) must be pre-approved. In general, HMO members must use health care providers who are contracted with their HMO or their services will not be covered. Most HMOs have minimal deductibles (if any) and lower out-of-pocket costs than other types of health care plans.

Point of Service Plans

POS coverage is another example of a managed care plan. Generally, POS members must also choose a PCP like HMO members. However, with POS, members may opt to go to providers who are not in their health care insurers’ provider networks. When members exercise this option, there usually are separate out-of-network deductibles and higher coinsurances for covered medical services for choosing out-of-network providers.

Of course, members may use their POS benefits much like HMO members, seeking care from their PCPs and being referred to in-network providers when necessary. In this case, POS members will receive higher levels of benefits than if they had chosen to go out-of-network.

Preferred Provider Organizations

PPOs offer the flexibility of in-network and out-of-network benefits much like a POS. And, PPO members also enjoy lower out-of-pocket expenses by choosing in-network providers. The difference between POS and PPO is that PPO members are not required to choose PCPs. And, PPO members can usually self-refer to most provider specialties within their network for covered medical care.

Traditional (Indemnity) Plans

Traditional coverage, or “indemnity” as it is often referred to, offers the most freedom and flexibility. Traditional members may choose any doctor, specialist or hospital that they want, including their PCPs. Most traditional plans have a deductible associated with this type of plan. A deductible is a set amount that members must pay out of pocket each year before their insurer begins to pay for covered medical care.

Click here to learn more about each of these plans, starting with HMOs.