Group Health Insurance



Medical  plans can be divided into four major types: Health maintenance  organizations (HMOs), preferred provider organizations (PPOs), indemnity  plans and point-of-service plans (POS). 

HMOs: Doctors  are paid a set amount of money to provide a certain range of medical  services for a health maintenance organization. You must choose from the  doctors and hospitals affiliated with that HMO. Some HMOs have a  specific place where all its doctors work. In this case, you are limited  to that facility for your medical care. HMOs are less expensive, in  part because you don't have as much choice. If you choose to see a  doctor who is not part of the HMO, you may not be covered. 

Point-of-service  plans (gatekeeper): These plans are similar to HMOs and PPOs, in that a  network of health care providers is associated with them.  One difference is you must always see your primary-care physician first  in this type of plan. You cannot see an out-of-network doctor for care  without a
referral from your primary-care physician. The cost for  seeing an out-of-network doctor is higher. You will pay less if you go  to your primary care physician. 

PPOs (no gatekeeper):  Preferred provider organizations are similar to HMOs, in that a  federation of health care providers is involved. A PPO's list  of providers, however, tends to be larger than that of an HMO. Choosing  from the PPO's providers keeps down the cost of care. Most PPOs will  cover costs of services of a doctor not associated with the plan, but at  a higher cost to you. HMOs and PPOs are "managed care" plans. The insurance company manages the plan by controlling who provides health care. The company also monitors the use of its services by its members. The cost of these services also are evaluated in managing the plan. 

Indemnity  medical care plans: You receive medical care in exchange for paying  a monthly premium under this coverage. No one controls who your provider  is, so you may see any doctor you like. Premiums may be higher than  other plans because you are not restricted in selection of a doctor.  Some indemnity plans cover "wellness" care (visits to the doctor when  you are not sick), and some do not. Check with your employer for the  details of your plan. 

Estimated Value

A  typical medical care plan adds about $2,500-$3,000 a year to your  total compensation package if you are single. If you have a family, add  about $6,000-$7,000 a year..

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