Plan Options

You have several options from which to choose your family medical insurance plan. Here we’ll explain the four basic types of policies.

Indemnity Coverage

An indemnity plan is the most traditional type of family medical insurance plan. Indemnity coverage may also be called a fee-for-service plan. With this type of coverage, each family member must meet a deductible before the insurer begins to pay claims. After this deductible is reached, the member will be responsible for coinsurance up to a certain limit. For instance, you might be responsible for 20% of your medical expenses with a maximum of $10,000. The advantage of indemnity family medical insurance is that it gives you the freedom to select any provider regardless of network participation. On the down side, out-of-pocket costs can be considerable with these plans.

HMO Coverage

HMO stands for health maintenance organizations. An HMO family medical insurance plan is a policy for which you pay monthly premiums and, in exchange, the HMO pays for medical care for you and your family, including doctor visits, emergency care, hospital stays, surgery, and more. The HMO usually arranges for this care through its own providers and facilities or through physicians and other healthcare providers that are under contract with the HMO (in network). Your choice of healthcare providers and facilities is generally limited to those that have contracted with the HMO. An HMO family health insurance plan is one of the cheapest medical plans, but it also offers the least amount of choice.

PPO Coverage

A PPO, or preferred provider organization, is a hybrid of traditional fee-for-service plans and HMO coverage. As with an HMO, a PPO family medical insurance plan offers a limited number of doctors and healthcare facilities from which to choose. When you use these providers, sometimes called in-network or “preferred” providers, most or all of your medical expenses are covered. Unlike with an HMO plan, a PPO insurance policy allows you to select providers outside of the network and still receive some coverage. If you decide to go out of network, the insurer will not cover as much of your expenses. A PPO provides more flexibility in your healthcare decisions than an HMO.

POS Coverage

Some HMOs will offer a family medical insurance plan that has an indemnity option, known as a point-of-service (POS) plan. With this kind of family health insurance plan, the primary care physician usually refers patients to providers within the network. But with a POS plan, policyholders can visit providers outside of the system’s network and still receive some coverage. If your primary care physician makes a referral to a specialist out of network, your insurer will pay all or most of the bill. If you refer yourself to a specialist out of network, you will usually have to pay coinsurance, which is the portion of your medical bills that you must pay out of pocket.

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