In other words, they require patients to pay for a certain amount of care each year before they're eligible for coverage. Once the patient has met the deductible, which may run to several hundred dollars, the insurance company generally pays a portion of subsequent costs - typically 80 percent. HMOs provide coverage at a set annual rate for treatment within a fixed network of doctors. Patients choose a primary care physician who, in conjunction with the insurance company, generally oversees referrals to specialists. Treatment outside the network and unapproved treatment by specialists are typically not covered.
Patients usually pay less than in indemnity plans, but have less freedom of choice.
When patients refer themselves to network doctors, including specialists, they're charged a minimal co-payment for services. Outside the network, they must pay up to a deductible amount and pay a portion of all subsequent costs, as in indemnity plans. PPOs let patients decide when to pay more for freedom of choice. POS plans use the physician network and primary care physician model, like HMOs. The primary care physician can refer patients within or outside the network of doctors without jeopardizing coverage.