The Facts about PPO, HMO, FFS, and POS Plans

The most common form of health insurance today is known as managed care. Within the managed care umbrella, you'll find three types of plans — health maintenance organizations (HMOs), preferred provider organizations (PPOs), and point-of-service (POS) plans.

HMOs and PPOs are the most popular type of plans, but before the advent of managed care, fee-for-service plans (FFSs) were the standard form of health care coverage.

Fee-for-Service Plans

Fee-for-service plans (also known as indemnity plans) are the oldest form of health insurance coverage. These plans are the most expensive, but for those who can afford them, FFSs offer the most freedom and flexibility.

Participants choose their own doctors and hospitals, and can refer themselves to specialists with little interference from insurance companies. These plans require large out-of-pocket expenses. Patients pay medical fees up front and then submit bills for reimbursement.