When you are buying individual health insurance in the United States you face a confusing mish-mash of acronyms, including PPO, POS, HMO, and HSA. With so many acronyms, each representing different types of plans, it's no wonder so many people find health insurance comparison confusing. Keep reading and we will sort it all out so you can take the first step to figuring out which one is best for you and your family.
Traditional Health Insurance
In a simpler time traditional health insurance was the only thing available and it's still the first thing people think about when they think about insurance. Every month you pay the company a premium and, after you pay a certain deductible, the company pays your medical bills. Some traditional plans require co-pays for doctor office visits and prescriptions.
PPO – Preferred Provider Organizations
PPOs, or Preferred Provider Organizations, are often a bit less expensive than traditional health insurance plans. In these plans, the PPO will cover almost all of your medical bills but you have to use their network of doctors and hospitals. These are the "preferred providers" in the title. You can use physicians and hospitals outside of the network, but your coverage is reduced so it ends up costing you more to do so.
POS – Point of Service Plans
POS, or Point of Service plans, are similar to PPOs. The big difference is that you have to see a primary care physician and then he or she will refer you to any specialist you may require. You can not go directly to the specialist first; you need the initial diagnosis from the primary care physician to get the necessary referral. Similar to PPOs, POS plans have a preferred provider network and you will have to play more if you choose to go outside the network for medical care.
HMO – Health Maintenance Organizations
HMOs, or Health Maintenance Organizations, generally offer greater savings than PPOs or POS plans, but there is a trade-off. You are restricted to a network of health care providers and, generally, you will not be covered at all if you seek care outside of the network. Also, the network of providers for most HMOs is smaller than what you will typically find in a PPO or POS.
HSA – Health Savings Accounts
HSAs, or Health Savings Accounts, are designed to work together with a low-cost, high-deductible plan. The idea is that you will deposit money into a special non-taxed, interest-bearing savings account that is set up specifically and exclusively for medical expenses. The savings account is used to cover the high deductible if you need to cover expensive medical costs before the company picks up the rest of the bill.
Now when you make a health insurance comparison you know the basics of the strengths and weaknesses of the different types of insurance programs. Take some time to do your homework and research the specifics of any plans but, most importantly, make sure that both your physical and your financial well-being are safeguarded with quality protection.