• When it comes to picking a health care plan, there's more to it than selecting a company you trust. Even within one company, there can be several types of coverage options. Each of these plan options work differently, and depending on your health care needs, one may work better for you. Understanding how they differ will help you make a more informed health coverage choice.
  
  

Health Maintenance Organization

• HMOs are health plans that are based on networks. HMOs contract with doctors and providers, and the consumer is typically limited to the network for selecting doctors and specialists. Consumers in an HMO must select a main doctor, called the primary care physician, to provide basic services. To access all health care, the consumer must go through the PCP and must get referrals from the PCP to access specialists. Consumers in HMOs typically pay a monthly premium, have an annual deductible (the amount you pay out of pocket before your insurance starts) and pay set amounts for services called co-payments.
  
  

Fee-for-Service

• Unlike an HMO, fee-for-service consumers can go to any doctor or provider that they like. However, the insurance companies only pay for a portion of the services provided and the consumer is responsible for a co-insurance. For example, the insurance company may pay for 80 percent of the costs, so the consumer is responsible for the remaining 20 percent. Fee-for-service plans also require much more paper work to submit claims. Doctors' offices, however, will usually take care of this for the consumer. In a fee-for-service plan, the consumer will usually also pay a monthly premium and an annual deductible.
  
  

Preferred Provider Organization

• A PPO is like a combination of an HMO and a fee-for-service plan. PPO consumers have a network to choose from, however, for an additional cost, they can see any doctor they choose just like in a fee-for-service plan. PPOs, however, do not require their consumers to select a primary care physician. Since they don't have a PCP, they usually do not need a referral to see a specialist.
  
  

Point of Service

• POS plans are similar to both PPOs and HMOs, except they are more customizable. In a POS, the consumer is not required to select a primary care physician, however, they can if they want. If they do not select a PCP, they will pay higher co-payments or deductibles than those that do. POS also have a network of providers, and members may visit out-of-network providers at an additional cost.