Understanding Private Health Insurance

Individual or Family Health
Group Health Coverage

The Alphabet Soup of Understanding Private Health Insurance

HMO, PPO, FFS, HSA, MSA - it sounds like a recipe for alphabet soup and it's enough to drive you batty PDQ (Pretty Darn Quick). But if you are looking for low cost health insurance, it is important that you know not only what all these letters and abbreviation stand for, but what they really mean and what are the differences between them.

HMO's and PPO's Even if you are new to the health insurance marketplace you have undoubtedly heard of the term managed care. The "O" in both of these acronyms stands for "organization" - and that is the basis of managed care, you receive your treatments as part of a provider organization or network.

HMO stands for Health Maintenance Organization, and the emphasis there is on "maintenance". It is in the best interest of the HMO to keep you healthy. HMO's tend to be big on wellness programs and preventive medicine; they also tend to be the most affordable health insurance. In an HMO you do need to choose a PCP - another initial! - a Primary Care Physician, and you need referrals to see a specialist, and can only see a specialist who is in the organization.

PPO is the abbreviation for Preferred Provider Organization. A PPO gives you more freedom and in some ways resembles the traditional FFS, (Fee For Service) health insurance plan. In a PPO unlike an HMO you don't have to choose a Primary Care, you may see physicians and specialists without a referral, and you can even see healthcare providers outside of the Network, but you will have to pay more for their services. PPO plans are popular because they tend to still be low cost health insurance, and yet offer a bit more flexibility than an HMO.

FFS stands for Fee-for Service. This is the traditional or indemnity type of comprehensive health insurance plan, where you can see any physician at any time, and the insurance company will cover all or most of the costs once a deductible has been met. Fee-for-Service plans offer the greatest flexibility and usually the most comprehensive coverage, but are also usually the most expensive.

However with the changing nature of the health insurance landscape today, and more and more consumers looking for alternative health insurance policies and affordable medical coverage, the line between all of these letter combinations are not as distinct as they once were. HMO's are becoming increasingly more flexible and FFS plans are becoming more affordable - and a few more letters have been tossed into the soup such as HSA and LPHD, for Health Savings Account and Low Premium High Deductible Health Plans.

So all in all it is best to assess what your true health insurance needs are and research the plan that is right for you - TTFN.