There are three basic types of managed care health insurance plans: (1) HMOs, (2) PPOs, and (3) POS plans. Show
HMOs Unlike many traditional insurers, HMOs do not merely provide financing for medical care. The HMO actually delivers the treatment as well. Doctors, hospitals, and insurers all participate in the business arrangement known as an HMO. HMOs provide medical treatment on a prepaid basis, which means that HMO members pay a fixed monthly fee, regardless of how much medical care is needed in a given month. In return for this fee, most HMOs provide a wide variety of medical services, from office visits to hospitalization and surgery. With a few exceptions, HMO members must receive their medical treatment from physicians and facilities within the HMO network. The size of this network varies depending on the individual HMO. When you join an HMO, you choose a primary care physician (PCP) who is your first contact for all medical care needs. The primary care physician provides your general medical care and must be consulted before you can see a specialist. Because of this control system, HMO costs tend to increase less rapidly than other insurance plans. Advantages of HMOs Focus on wellness and preventative care Typically no lifetime maximum payout Disadvantages of HMOs Care from non-HMO providers generally not covered PPOs A PPO is actually a group of doctors and/or hospitals that provides medical service only to a specific group or association. The PPO may be sponsored by a particular insurance company, by one or more employers, or by some other type of organization. PPO physicians provide medical services to the policyholders, employees, or members of the sponsor(s) at discounted rates and may set up utilization control programs to help reduce the cost of medical care. In return, the sponsor(s) attempts to increase patient volume by creating an incentive for employees or policyholders to use the physicians and facilities within the PPO network. Rather than prepaying for medical care, PPO members pay for services as they are rendered. The PPO sponsor (employer or insurance company) generally reimburses the member for the cost of the treatment, less any co-payment percentage. In some cases, the physician may submit the bill directly to the insurance company for payment. The insurer then pays the covered amount directly to the healthcare provider, and the member pays his or her co-payment amount. The price for each type of service is negotiated in advance by the healthcare providers and the PPO sponsor(s). Advantages of PPOs Out-of-pocket costs generally limited Disadvantages of PPOs More paperwork and expenses than HMOs POS plans Advantages of POS plans Minimal co-payment No deductible No "gatekeeper" for non-network care Out-of-pocket costs limited Disadvantages of POS plans Deductible for non-network care Tight controls to get specialized care
Overview | Understanding The Basics |
Types Of Insurance
What is the difference between a preferred provider organization and a health management organization?HMO plans typically have lower monthly premiums. You can also expect to pay less out of pocket. PPOs tend to have higher monthly premiums in exchange for the flexibility to use providers both in and out of network without a referral. Out-of-pocket medical costs can also run higher with a PPO plan.
What is the difference between managed care and PPO?Health Maintenance Organizations (HMO) usually only pay for care within the network. You choose a primary care doctor who coordinates most of your care. Preferred Provider Organizations (PPO) usually pay more if you get care within the network. They still pay part of the cost if you go outside the network.
What is the difference between a health maintenance organization HMO and a preferred provider organization PPO )? Pros and cons of each?With an HMO plan, you must stay within your network of providers to receive coverage. Under a PPO plan, patients still have a network of providers, but they aren't restricted to seeing just those physicians. You have the freedom to visit any healthcare provider you wish.
Whats the difference between MCO and HMO?A Managed Care Organization (MCO) is a healthcare provider that provides services for a set monthly fee. An MCO is either a Health Maintenance Organization (HMO) or a Managed Care Community Network (MCCN). HMOs are risk-bearing entities licensed by the Illinois Department of Insurance.
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