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Managed Care Plans: HMOs, PPOs and POS Plans
There are three main types of managed care insurance: HMOs, PPOs and POS health insurance plans. Each offer the consumer the standard care associated with managed care plans with some variations.
An HMO, or Health Maintenance Organization plan, funds healthcare services with an emphasis on preventative care. An HMO not only pays for the medical care, it also provides the care itself and runs a network of health professionals including hospitals, doctors and health clinics.
If you join an HMO, you will pay a fixed monthly fee or premium. You can access any type of medical service providing that the provider is a member of the HMO's network. You will usually have a primary care physician that will act as your first point of contact. To see a specialist, you must gain a referral from your physician beforehand.
There are many advantages an HMO plan offers. Firstly, its focus on preventative care encourages individuals to seek treatment in the early stages of an illness. HMOs usually offer lower premiums, low out of pocket costs and no deductible fees. They have no limitations on age and will continue to offer services as long as your premium is up to date.
However, some disadvantages associated with an HMO plan includes reduced choice of medical professionals and a mandatory referral before seeing a specialist.
A PPO, or Preferred Provider Organization, is similar in nature to an HMO but only offers services to a specific group. Medical professionals that belong to the PPO's network offer reduced cost treatment. However policy holders may also access other services from outside the network.
The advantages of having a PPO plan is that you can access any health professional you wish. If you use a PPO professional, 90 percent of your costs will be covered as opposed to 60 percent if you go outside the network. Out of pocket costs are generally low and capped if they are for treatment sought outside the network.
Finally a POS, or Point of Service plan,allows individuals to seek treatment from a physician inside the network with no deductible fee. A deductible is charged however for seeking treatment outside the network. A POS gives the individual the freedom to mix parts of an HMO and PPO plan, therefore is highly flexible.
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