• What are the types of insurance I can get to cover my medical expenses?
• What is an HMO?
• What is an indemnity plan?
• What is a PPO?
• How is individual insurance different from group insurance?
• What is a deductible?
• What is a co-payment?
• What is co-insurance? 
• What types of services are typically excluded from major medical expense coverage?
• What is a pre-existing condition and how does it affect medical insurance coverage?
• How can I reduce my premiums and out-of-pocket expenses?
• I have had a serious health condition that appears to be stabilized. Can I buy individual health coverage?
• I have an insurance plan that is supposed to pay 80% of my medical charges and I pay the other 20%.  Sometimes the coverage is not 80% of the charges and I have to pay more. Why?
• What are some of the features of a health plan that I should assess before I select one? 

A:  There are three major types of insurance plans in the market today: HMOs (Health Maintenance Organizations), PPOs (Preferred Provider Organizations), and indemnity (fee-for-service) plans. The table below compares the plans in three important areas you will want to consider in choosing the best type of plan for you:

A: HMO stands for Health Maintenance Organization. An HMO is a group health insurance plan in which members select a primary care physician (PCP) who will be the initial point of contact between the member and any specialist the member sees. HMOs cover a broad range of services, with the emphasis on preventative care. They typically require very small co-payments and deductibles. In exchange for the lower costs, however, there is less freedom of choice for insured individuals using the HMO plan, since they must obtain care through their PCP, who then determines whether a specialist is needed.

A: An indemnity plan, often referred to as “fee-for-service”, reimburses physicians and hospitals for services performed as well as reimbursing insured individuals for medical expenses incurred. Such plans contrast with prepaid plans (like HMOs) that provide services under previously negotiated terms. The advantages of this plan are that it allows you to select and see any provider, including specialists without the need for a referral first. Its flexibility and freedom, however, come at a higher premium cost.

A: PPO stands for Preferred Provider Organization. A PPO is a healthcare delivery system that contracts with providers of medical care to offer discounted services to members. Members may seek care from non-participating providers but generally are penalized for doing so through additional deductibles or co-payments.

A: Unlike group insurance where your employer or association is the policyholder and you, the insured, only get a “certificate” of insurance, you are the direct policyholder if you purchase individual insurance. The principal advantage of this direct contract is that the insurer generally has fewer rights to cancel or change your coverage under individual insurance.

A: A deductible is a flat amount an insured individual pays before the insurance company will make any benefit payments under a policy. Most insurance companies will offer several different deductible options from which to choose.

A: A fixed dollar amount that the insured pays to a provider each time a medical service is performed.

A: Co-insurance is a cost-sharing arrangement in which an insured member pays a specified proportion of the medical bills. For example, in an 80/20 plan, the member pays 20% and the insurance plan pays 80% of each claim for services rendered. The more co-insurance a person absorbs, the lower the plan's premiums.

A: Common exclusions under major medical plans include the following; convalescent or custodial care, cosmetic surgery, occupational injuries, and routine dental and vision care. All policies differ, so make note of your plan's exclusions and requirements.

A: A pre-existing condition is one that was known or treated for some specific period of time prior to the person's effective date of coverage. Most major medical plans have a preexisting condition clause enabling the carrier to exclude coverage for a period of time, sometimes as long as 24 months, after the effective date of coverage. As the definition of a preexisting condition and the clauses pertaining to them differ between policies, it is important that individuals be aware of their policy's provisions.

A: You can reduce your premiums by selecting a higher deductible amount and/or choosing larger co-insurance amounts. Reducing out-of-pocket expenses can be accomplished by selecting a higher amount of co-insurance so the insurance company is paying less of your everyday medical bills. You decide how you should manage your health care costs - lower premium means a higher deductible and more financial risk to you if you become ill; a higher premium means a lower deductible and less financial risk.

A: Depending on what your condition is and when it was diagnosed and treated, you could have difficulty getting health coverage. However, the insurer may provide coverage and do one of the following; ask for a higher premium, increase the deductible, or exclude the specific medical problem from coverage (as long as the insurer abides by state and federal laws). Many insurance companies will offer a simple pre-screening application or questionnaire that will enable you to determine your eligibility before you complete the entire insurance application form. Alternatively, many states have developed insurance pools to provide coverage for residents who cannot obtain it on the open market.

A: Insurance plans typically cover 80% of "allowable charges" (also called "reasonable and customary charges"), which are determined by assessing the prevailing cost of a medical service in a given geographic area. For certain services, your doctor might be charging higher than the allowable amount. The insurance company will only pay 80% of the allowable amount, not 80% of the doctor's charge. That is why you might be left with a bill to pay.

A: The most important are: access to the providers you want to use, exclusions and limitations, deductibles and coinsurance provisions and maximum benefits payable. In Addition, here is a checklist of some specific coverages you may want to inquire about: