Health Insurance Providers and Products
Core concepts
Know the major delivery models. Indemnity (fee-for-service) plans let insureds choose any provider and reimburse charges. HMOs require a primary care physician, use closed networks, and emphasize preventive care and capitation. PPOs offer in-network discounts with out-of-network options at higher cost. POS plans blend HMO and PPO features. EPOs cover only network providers. Understand capitation (fixed payment per member per period), utilization review, and gatekeeping.
Know product types: individual and group coverage, short-term medical, hospital indemnity, critical illness, accident, disability income, long-term care, and dental/vision. Distinguish medical expense coverage from supplemental products. Understand Medicare Advantage and Medigap at a high level, and the role of TPAs and carriers.
Traps
Questions often blur HMO and PPO network rules, or assume all plans cover out-of-network care. Another trap: confusing capitation with coinsurance, or treating supplemental products as comprehensive medical coverage. Watch for disability income questions where the benefit is a percentage of income, not actual medical bills.
Worked example
A member enrolled in an HMO sees an out-of-network specialist without referral. Because HMOs generally require PCP referral and network use, the claim may be denied or paid only in emergencies. Under a PPO, the same visit might be covered at a reduced out-of-network benefit level.
Rule of thumb: HMO = gatekeeper and network-only; PPO = network discounts with out-of-network flexibility.