Understanding Your Health Insurance and Medical Insurance Plans

From Bobbie Sage

What is the Difference Between HMO, PPO, and POS?

Managed Healthcare Plans are types of health insurance policies that help employers offer their employees discounted medical insurance services by negotiating reduced charges with hospitals and physicians. There are three basic types of Managed

Healthcare Plans: HMO, PPO, & POS

Health Insurance and Medical Insurance Managed Health Care Plan Definitions

1. HMO: A Health Maintenance Organization, or HMO, provides employers a way to take care of all their employees’ health care needs with reduced costs by negotiating with specific doctors, hospitals, and clinics. These specific providers must be used by the employee for the reduced fees to be provided to their medical insurance plan.

2. PPO: In a Preferred Provider Organization, or PPO, an employer can also provide employees with reduced costs billed to their health insurance plan.

Similar to a HMO, but the employees can choose the physician they want to see instead of being solely restricted to the HMO providers. An employee can choose between a member or nonmember provider. The member provider would be the least expensive choice for the employee.

3. POS: With a Point of Service plan, or POS, employees can choose their own physician that has previously agreed to provide services at a discounted fee. In a POS the employee would have to use the chosen physician as a gateway first before moving on to a specialist. In other words, whenever the employee would have a medical issue the POS physician must be contacted first in order to obtain the most benefit from the health insurance plan.

All managed care plans vary greatly in benefits and out of pocket expenses, so it is important to review your health insurance and medical insurance choices wisely and try to find the best policy to fit your circumstances.