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Types of Medical Insurance


Insurance plays a big part in the daily operations of any small business. Like the average business owner, your medical practice needs coverage for everything from employee benefits to rental insurance. But in addition to choosing coverage for normal small business liabilities, medical entrepreneurs have to decide which types of medical insurance to accept from their patients.

Over 90% of American adults use health insurance to cover their medical expenses. That means the majority of your practice’s business transactions will involve getting paid through an insurance company. For this reason, it’s important to understand the different types of medical insurance available to patients today.

  • An HMO, or Health Maintenance Organization, requires patients to see providers who are members of an HMO network. In many cases patients need a referral before they can see a specialist.
  • A PPO, or Preferred Provider Network, allows patients to see providers outside of their network in exchange for a higher fee.
  • A POS, or Point of Service plan, often requires a specialist referral but may also allow the patient to see an out-of-network provider for a higher fee.
  • An EPO, or Exclusive Provider Organization, is similar to an HMO except patients usually don’t need a referral from a specialist.

Understanding the different types of medical insurance will help you decide which types of insurance you will accept in your practice, and which insurance companies you want to work with.

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