Health Insurance Information
Managed Care: An Explanation
You will hear the term "managed care" quite a lot in the United States. It is a way for health insurers to help control costs. Managed care influences how much health care you use. Almost all health insurance plans have some sort of managed care program to help control health care costs. For example, if you need to go to the hospital, one form of managed care requires that you receive approval from your health insurance company before you are admitted to make sure that the hospitalization is needed. If you go to the hospital without this approval, you may not be covered for the hospital bill.
Fee-for-Service Health Plans
This is the traditional kind of health care policy. Health insurance companies pay fees for the services provided to the insured people covered by the policy. This type of health insurance offers the most choices of doctors and hospitals. You can choose any doctor you wish and change doctors any time. You can go to any hospital in any part of the country.
PPO: Preferred Provider Organizations
The preferred provider organization, or "PPO", is a combination of traditional fee-for-service and an HMO. Like an HMO, there are a limited number of doctors and hospitals to choose from. When you use those providers (sometimes called "preferred providers", other times called "network providers"), most of your medical bills are covered.
When you go to doctors in the PPO, you present a card and do not have to fill out forms. Usually there is a small co-payment for each visit. For some health care services, you may have to pay a deductible and coinsurance.
As with an HMO, a PPO requires that you choose a primary care doctor to monitor your health care. Most PPOs cover preventive care. This usually includes visits to the doctor, well-baby care, immunizations, and mammograms.
In a PPO, you can use doctors who are not part of the plan and still receive some health insurance coverage. At these times, you will pay a larger portion of the bill yourself (and also fill out the claims forms). Some people like this option because even if their doctor is not a part of the network, it means they do not have to change doctors to join a PPO
POS: Point-of-Service Plans
Many HMOs offer an indemnity-type option known as a Point-of-Service or "POS" health care plan. The primary care doctors in a POS plan usually make referrals to other providers in the health plan. But in a POS plan, members can refer themselves outside the plan and still get some coverage.
If the doctor makes a referral out of the network, the health care plan pays all or most of the bill. If you refer yourself to a provider outside the network and the service is covered by the health plan, you will have to pay coinsurance.
HMO: Health Maintenance Organizations
A health maintenance organization, or "HMO", is a prepaid health plan. As an HMO member, you pay a monthly premium. In exchange, the HMO provides comprehensive health care for you and your family, including doctors' visits, hospital stays, emergency care, surgery, laboratory (lab) tests, x-rays, and therapy.
The HMO arranges for this health care either directly in its own group practice and/or through doctors and other health care professionals under contract. Usually, your choices of doctors and hospitals are limited to those that have agreements with the HMO to provide health care. However, exceptions are made in emergencies or when medically necessary.
There may be a small co-payment for each office visit, such as $5 for a doctor's visit or $25 for hospital emergency room treatment. Your total medical costs will likely be lower and more predictable in an HMO than with fee-for-service health insurance.
Because HMOs receive a fixed fee for your covered medical care, it is in their interest to make sure you get basic health care for problems before they become serious. HMOs typically provide preventive care, such as office visits, immunizations, well-baby checkups, mammograms, and physicals. The range of health services covered varies in HMOs, so it is important to compare available HMO plans. Some services, such as outpatient mental health care, often are provided only on a limited basis.
In almost all HMOs, you either are assigned or you choose one doctor to serve as your primary care doctor. This doctor monitors your health and provides most of your medical care, referring you to specialists and other health care professionals as needed. You usually cannot see a health care specialist without a referral from your primary care doctor who is expected to manage the health care you receive. This is one way that HMOs can limit your choice.
Before choosing an HMO, it is a good idea to talk to people you know who are enrolled in the HMO you are considering. Ask them how they like the services and care given.
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