Preferred Provider Organizations (PPOs)
This plan type closely resembles a Fee-for-Service plan. A PPO
has arrangements with a network of doctors, hospitals and other providers
who have agreed to accept lower fees from the insurer for their services.
As a result, your cost sharing should be lower than if you go outside
the network. In addition to the PPO doctors making referrals, plan
members can refer themselves to other doctors, including ones outside
the plan. This makes it a best-of-both-worlds option for many patients:
lower costs in the network, but flexibility to leave the network
if necessary.
If you go to a doctor within the PPO network, you will probably
pay a copay (a set amount for certain services -- like $15 for a
doctor visit or $10 for a prescription). Your coinsurance will be
based on lower charges for PPO members.
If you choose to go outside the network, you will have to meet
the deductible and pay coinsurance based on higher charges. You might
also have to pay the difference between what the provider charges
and what the plan will pay.
Health Maintenance Organizations (HMOs)
HMOs offer members an array of health benefits -- usually including
preventive care -- for a set monthly premium. The rule? You must
use the health care providers and facilities within the HMO network
in order to receive coverage, unless it's an emergency. Most HMOs
require a small copay for each visit to a doctor or plan facility.
Some require no payment when you visit doctors. (These plans usually
have slightly higher monthly premiums.) HMOs generally provide preventive
care like annual check-ups, flu shots, hearing tests, etc., at lower
out-of-pocket costs to you. This makes them highly preferred for
many people who don't want to pay huge fees for an annual physical,
a cholesterol check or other necessary tests.
There are several types of HMOs:
The Staff Model HMO
Here the doctors are actual employees of the health plan, and you
see them at a central medical center or office.
Individual Practice Associations (IPAs)
This type of HMO contracts with outside physician groups or individual
doctors who have private practices, and you see them in their own
offices.
Primary Care Physicians:
A partnership with your doctor
An HMO will typically provide you with a list of physicians. From
that list, you choose a "primary care physician." This
doctor will serve as your chief medical officer. He or she will coordinate
your care, see you when you are sick and make any decisions about
whether you should see a specialist.
What kind of doctors are primary care physicians?
Usually, they fall into one of the following specialties:
- Family practice doctors or general practitioners
These doctors
are trained to diagnose and treat
a variety of health conditions. If you are young and in good health,
a general practitioner
is your best bet. Many HMO members select
the same general practitioner for their
entire family.
- Internists
Specializing in internal medicine, these
physicians are trained to treat health conditions like diabetes
and cardiovascular disease. If you
are managing high blood pressure, heart disease or diabetes,
an internist is a wise choice.
- Pediatricians
These doctors only treat children, usually
under the age of 12.
- OB/GYN
Some plans allow women of childbearing age to select an
OB/GYN as their primary care physician.
Other types of doctors
Some plans may allow a specialist to be selected as a primary care
physician. For example, a diabetic may elect to have an endocrinologist
(in the HMO plan, of course) as his primary care physician.
How do you pick a primary care physician?
Most HMOs only offer a list of doctors' names. How can you find
out more about them?
If you know others in the plan, ask for recommendations.
Make appointments to meet with doctors in your area to find one
who is right for you.
If the plan's doctors are located in the same facility, ask the
staff nurse for recommendations.
Can you use your current doctor?
If he or she does not belong to the HMO, you will have to switch
to a doctor who does. But don't worry that once you pick a primary
care physician, it will be set in stone. Most plans allow you to
switch your primary care doctor several times a year. If you don't
like one, select another.
Point-of-Service (POS) Plans
A hybrid of the HMO and PPO is known as the POS plan. Here, the
primary care doctors in the plan usually make referrals to other
providers within the plan. However, if a member wants to go outside
of the network, the POS plan will pay for a predetermined amount
of the bill. POS plans generally cost more in monthly premiums than
straight HMOs, but they give you the flexibility to call a doctor
on your own if you feel the need -- or if your primary care physician
doesn't.
Blurring the lines of Fee-for-Service and managed care
While Fee-for-Service and managed care are different, the differences
can get a little fuzzy. Many managed care plans now contain Fee-for-Service
elements. Conversely, almost all Fee-for-Service plans apply managed
care techniques to contain costs and guarantee suitable patient care.
What does this tell you? Read the different plan descriptions carefully!
You may find that you get Fee-for-Service options through your local
HMO at a substantial savings. Or you may discover that with all the
caveats, your Fee-for-Service plan walks and talks more like a restrictive
managed care plan and is not worth the extra out-of-pocket expense.
Guidelines in every plan
Whether you choose a Fee-for-Service plan, a PPO or an HMO, you
will find that your plan has certain rules you have to follow.
Let's say you fall and break your leg while rock-climbing on vacation,
and you are rushed to a hospital that is not part of your HMO network.
Your emergency medical coverage is most likely included in your plan.
After you've been patched up, however, the medical team feels you
would be best served by tricky follow-up knee surgery. Chances are,
either you or your doctor will have to call your insurance provider
to get the go-ahead for the non-emergency treatment. This is known
as "pre-authorization." It occurs when your insurer must
approve a procedure before you actually have it.
Utilization review
Utilization review is a fancy term for the process used by plans
to determine whether a specific medical or surgical service is appropriate
or medically warranted. For example: You believe your severe neck
pain will be alleviated by a new cervical disk surgery you read about
on the Internet. You've talked to your physician about it, and he's
familiar with the procedure, but the practice is not regarded as
absolutely necessary for your condition. The Medical Review Specialist
may be brought in to make the final decision about whether or not
your insurance will cover the cost of the operation.
But wait, there's more! Find out about alternate types of coverage
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