Types of Insurance Plans and How They Work

Fee For Service (FFS):

An FFS plan usually:

Has a low monthly premium
Requires a copay for doctor's visits and other provider services
Has a deductible and coinsurance, but some don't

Health Maintenance Organization (HMO):

An HMO generally:

Requires you coordinate all your care through a single primary care physician (PCP)
Requires that your PCP must refer you to a specialist, if needed
All providers must be in the network
Is often less expensive than other plans
Gives you less control over choosing your healthcare providers
Doesn't have a deductible
May have a small copay for each doctor visit

Exclusive Provider Organization (EPO):

An EPO is:

Like a traditional HMO with some differences
Uses a network of providers
Doesn't always include a PCP
Allows self-referral to a specialist in the network

Point of Service (POS)

A POS plan:

Is a combination of an HMO and an FFS plan
Requires a PCP who coordinates your care and makes referrals to other providers in the network, when needed
Allows you to refer yourself to other providers
Has no deductible for in-network providers
Has a deductible and coinsurance for out-of-network providers
Includes a small copay for provider visits
Covers annual checkups and immunizations

Preferred Provider Organization (PPO)

A PPO:

Doesn't require you to work with a primary care physician (PCP)
Has a focus on preventive care
Covers annual checkups and immunizations
Uses a network of doctors and other providers
Has separate reimbursement rates for in- and out-of-network providers
Allows you to self refer
Has an out-of-network deductible
Has a maximum out-of-pocket (MOOP) for deductibles and coinsurance
MOOP doesn't include copays and monthly premiums
Pays 100 percent of your care when you reach the MOOP

Questions to ask in choosing a health insurance plan

Since health plans vary, you should fully understand all the costs and restrictions before visiting a doctor

Preventive care?

Want an annual check up or flu shot? Most fee-for-service (FFS) plans don't cover preventive care - including annual check ups, immunizations, and more - but many managed care plans do, including Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), and Point of Service (POS) plans do.

Healthy or not?

How often do you get sick? For people who rarely go to the doctor, a low premium and a higher deductible might work best. That way you pay for the occasional doctor visit yourself, but you're covered if you have an accident or serious illness.

Doctor loyalty?

Do you have a specific doctor or hospital you're loyal to? An HMO requires you to choose and then use a specific Primary Care Physician (PCP) and your doctor may not be one of your choices. In PPO and POS plans, you can see whatever doctor you want, but you'll pay more if the doctor is out of the plan's network. If you really want to use a specific doctor or hospital, you can choose a fee-for-service (FFS) plan - where you can see whatever doctor you wish, or an HMO if your doctor is in the network. But be sure to read the fine print because you'll pay each time a service is needed.

Need a specialist?

Do you need to see a specialist? An HMO may require you to have a referral from your primary care physician (PCP) in order to see a specialist. If your PCP won't refer you, then your insurer won't cover your specialist visit and you'll have to pay out of your own pocket. With other plans, be sure your specialist is in-network.

Learn more about Health Insurance Coverage.

Health Insurance Glossary

Watch Healthcare Video: How does health insurance work?