Private Health Care Coverage

What is Private Health Care Coverage?

While the answer to this question may seem obvious, private health care coverage comes in so many forms that finding the right type that you can afford and that offers the benefits you need or want can be quite complicated.

When an insurance company, in exchange for the payment of premium, agrees to pay for medically necessary services as the result of an injury or illness it's called a "fee-for-service" plan. The health insurance policy describes the benefits and the amount of money the company will pay for services. Usually, there are no restrictions on the doctors or hospitals you can choose.

In other cases, the health insurer creates a preferred provider organization, or PPO. Under this type of plan, there is a network of health care providers for which benefits are paid at a higher level than for physicians and medical providers who are not members of the network.

Yet another form is the point-of-service plan, or POS. It's similar to a PPO in the sense that there is a network of health care providers, but you can only access specialists through a gatekeeper called the primary care physician, or PCP. This type of coverage may pay for some services outside the network, but at a lower rate.

A health maintenance organization, or HMO, offers the fewest choices when it comes to picking a health care provider. The HMO contracts with health care providers who offer their services at the time of illness or injury. A PCP will refer you to a network specialist when necessary. Ordinarily, there are no benefits available for services outside the network.