Taking a Closer Look at Traditional, HMO, and PPO Insurance

There are many different types of health insurance policies available to those looking for coverage. The majority of these policies falls within one of three different categories: traditional, HMO, or PPO. Understanding the differences and the pros and cons of each is important when it comes to making the best decision possible.

Understanding Classic Medical Plans

Classic health insurance is typically the most flexible of the various types of health care plans. Any doctor can be chosen when using one of these policies and a specialist can be seen without obtaining approval from a primary care physician. Also, providers can be changed any time and the change will not affect coverage. Certain restrictions may apply, depending on the coverage obtained. For example, the insurance company's approval may be needed before checking into a hospital or in the case of an emergency.

Also with classic medical plans, most likely a certain amount on medical bills will have to be sent every year before the insurance provider begins to pay which is the deductible. After that, a part of every charge will have to be paid which is called a co-payment. There may also be a cap on total benefits which is the maximum amount the insurance company will pay. Once payments for covered healthcare reach the cap, the insurance company will pay 100 percent of costs covered in the policy.

Traditional health insurance is generally more expensive than other types of health insurance plans. Also with this type of policy there will most likely be background checks to determine if the policy will be accepted and to see if any pre-existing conditions will be amended to the policy.

Understanding HMO Coverage

The HMO, which stands for Health Maintenance Organizations, generally provides the doctors, hospitals, and insurers and they pay a fixed monthly fee regardless of how much medical care is needed in any given month. But this fee provides a wide range of medical services including office visits, surgery and hospitalization. Also in most cases HMO members must be treated by doctors and use facilities that are in the HMO system. With an HMO plan, members choose a primary care physician for all their medical care needs. And it will be required that members seek a referral from their primary care physician before being allowed to see a specialist. One other benefit to this type of plan are there are low out-of-pocket costs and there no deductibles or plan limits.

Understanding PPO Plans

PPO, which is Preferred Provider Organization, typically are less flexible than traditional health insurance plans, but are more flexible than HMO's. Visits to any health care provider are allowed, which includes being able to see a specialist. But if a doctor is chosen that is not a part of the PPO system the co-payment will be higher. Also before entering a hospital, PPO's almost always require their approval. But PPO's are likely to cover checkups and other preventive medical services than traditional health insurance plans. Also there is a choice of deductible and prescription coverage is included.

There are distinct differences between Traditional, HMO and PPO plans but they all offer many benefits to those seeking coverage.

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