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.
