Enrolling your family in the right type of insurance plan for your needs can be a daunting task. Health care providers (also known as HCPs) offer different levels of care based on the type of health insurance coverage you have. Insurance companies offer various options as well so it’s wise to understand exactly what you’re siging up to carry.
The most common one heard is HMO. These letters stand for Health Maintenance Organization. The first HMO dates back to the 1930’s, decades before most consumers ever heard the term. A HMO works as follows:
The employer (for group plans) or the insurance company buys a health care service package from a hospital or health care provider for an agreed monthly fee.
Premiums are paid no matter what kind of services are provided, claims made, or amounts accrued.
The HMO owns the facility – i.e., the hospital, medical center, clinic, and is the employer of the health care professional that HMO members are required to use. Most plans allow patients to seek care outside of the HMO network but the cost of care outside the organization is costly. Often, little or no coverage will be given.
Physicians who are part of the HMO network receive a salary and often bonuses if the HMO makes a profit AND if costs are kept as minimal as possible.
There are many hybrid versions of HMO plans today. Each, however, should contain the same basic elements. Some are more lenient toward seeking care outside the network organization; others are tailored to a specific group’s needs. As health care costs climb, more costs come straight out of the consumer’s pockets. Versions and variants of the basic HMO include the following:
PPOs were created out of some concerns about HMOs. PPO stands for Preferred Provider Organization and it differs from most HMOs in that independent practices contract to provide services to PPO members at lower prices. Each medical practice receives less money than under an HMO plan but in today’s climate, physicians and providers who won’t agree often lose patients.
PPO allow the patient to select their own preferred provider – a specific doctor or other practicitioner – from the approved list. A co-payment is made on each office visit, normally a set amount far less than the standard charge. Because the fee has been set, the insurance carrier will provide payment up to an agreed amount but the patient won’t ever pay more than the co-payment or co-pay. A similar system applies to prescriptions under a PPO plan. And, if the patient seeks medical care outside the PPO network, some coverage will be provided but not all. PPO plans often cost more out of pocket for the premiums but in the long run, they can be a better choice than an HMO. It all depends on individual or family needs.
MCO plans are another offshot of the basic HMO. A health care plan, group of health care providers, and/or an insurance company join together to create an organization. To keep costs as low as possible, patients must choose from a list of participating health care providers. If they opt for someone not on the list, there is no insurance coverage. Many MCO plans also make it more difficult for a patient to consult a specialist if one is warranted. That’s because one of the participating providers must make a referral for a specialist to come under insurance coverage. Some providers are prompt to file the paperwork but others aren’t.
The least common plan in these early years of the 21st century are the traditional FFS or fees for service. At one time this was the standard – the covered individual saw whatever health care provider he or she chose, sent in the bill, and was reimbursed for all or part of the cost by the insurance company. The few remaining FFS plans are generally expensive and may soon be a thing of the past.
Health care today is confusing. Consumers may not always get a full or comphrehensive explanation of plans or benefits from employers. The best bet is to study the options – if options are available – and consider the following points:
What is the deductible? This determines how much you’ll pay before coverage begins.
Cost of office visits to your primary health provider. Is there a co-pay and if so, how much?
Is the co-pay the same for specialists or is it more? And, what is the prescription co-pay amount?
Can you fill or refill prescriptions at your favorite local pharmacy or will you be required to use a mail-in program?
Check the coverage plan for reimbursement amounts.
Find out what your access to emergency care may be. Many plans now require a co-payment on arrival in the emergency room – something to consider if you may be rushing someone to the hospital. Other plans may require a call to an advice line, staffed by nurses, to determine if your condition constitutes an emergency or not.
The bottom line is that only you can make an informed decision about your families’ needs and the cost you’re willing to pay. Knowing what the acroynms stand for, however, helps. Be prepared to research plan choices and to know what kind of coverage you select.