There are four main types of health insurance. Traditional indemnity plans are at one end of the spectrum and health maintenance organizations (HMOs) are at the other. Preferred provider organizations (PPOs) and point-of-service plans (POS) combine features of both indemnity plans and HMOs, but are generally considered managed care plans.
It’s important to understand the differences between the four main types of plans, and we urge you to read through this section to familiarize yourself with each. But you should also bear in mind that distinctions among plans grow increasingly blurred everyday. Almost all indemnity plans (also called fee-for-service plans) apply managed care techniques to contain costs and guarantee appropriate care. Likewise, an increasing number of managed care plans contain fee-for-service elements. The most important thing to keep in mind is that there are more health insurance options available today than ever before, and that’s good news for consumers.
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