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A medical insurance policy plan is first seperated into two common terms, '"HMO"(Health Maintance Organization) and "PPO"(Preferred Provider Organization).Typically the HMO policy is designed to give you less out of pocket expense however limits you to a smaller group of doctors or hospitals.An HMO policy will cost you more premium a month and is becoming less popular as a way to manage health care. The PPO policy traditionally will have a deductible amount one must reach before the policy will pay a benefit for major medical services.The PPO is more common way to manage your health care and costs less then a HMO plan Since HMO plans are becoming more extint, we will discuss the outline of a PPO plan.

When shopping a health insurance policy, you must pay attention to these key words.

>The policies Network- This gives you an idea if your doctor is covered under a certain plan as In-Network benefits. Out-of-Network benefits will be much less.

> Your Deductible- This is the amount you are responsible typically for major medical services performed. Most PPO plans dont apply the deductible to preventive and routine services, doctor/specialist visits and medications.

>Co-Insurance- This is a percentage amount of what the policy will pay when a major medical claim is filled. Most common Co-insurances clauses are 80%, however there are many options based on your health care budget. For example you could get 50%, 70%, 90% even 100%.

>Stop-Loss- This is sometimes called Max-out-of-pocket. This is a the limit amount of Co-insurance a policy holder will pay before the plan will pay 100% of the claim.

Benefits typically apply as an annual basis. When you renewal is due your benefits reset. Sometimes benefits automatically reset on January 1. Make sure you read your policy to determine how it applies.

Here is an example of a hospital claim and how a policy will pay.

PPO Plan has $1,000 Deductible, 80% Coinsurance with a $2000 Stop-loss.

Claim amount is $25,000

Deductible (-$1,000) You Pay

Because the insurance company pays 80% you pay 20% up to $2,000.

So your total responsibility is $3,000 out of a $25,000 Claim.

The remainder of the year any services perfomed will be paid at 100% since you maxed out your responsibility for the year