Because of the extremely high costs of medical care, health insurance is an absolute must. Most people who have medical insurance acquire it through their employers. There are 3 varieties of medical insurance:
- Indemnity plans. You either pay a deductible after which the insurance company will pick up the tab, or you agree to pay a portion (e.g., 10%) of all medical bills up to a certain amount. These plans offer the most choices and can be purchased individually or by a company as a group benefit.
- Health Maintenance Organizations (HMOs). These are networks of medical personnel and facilities that provide medical care on a prepaid basis. The 2 most common types are:
- Group practice model: Hires or contracts with physicians to provide medical services in a central facility.
- Individual practice association: Contracts with individual physicians to provide medical services in their own offices.
- Preferred Provider Organizations (PPOs). Contracts a network of doctors, hospitals, and other healthcare providers who agree to treat members at special negotiated rates.