Please note that each insurance company and provider network has different procedures and benefits. The following answers to questions are generally the rule, but are not necessarily true for all health care plans. For specific information, please consult brochures and contracts supplied by companies in which you have an interest.
Q: What is an HMO?
An HMO is a Health Maintenance Organization, which is a network of health care providers including doctors, hospitals, pharmacies, and other medical facilities and professionals. The network works together to manage the quality and cost of each member's health care.
Q: How does an HMO work?
Each HMO member selects a Primary Care Physician (PCP) from a directory of participating physicians in the areas of general practice, family practice, internal medicine or pediatrics. The PCP will coordinate all of the member's health care needs. If the PCP can effectively provide care, he will. If he determines a specialist is needed, he will refer the member to a Participating Specialist in the HMO network.
Q: What are the advantages of an HMO?
HMOs are designed to manage the costs of medical care, which means members enjoy lower out-of-pocket expenses compared to traditional Indemnity medical insurance. Visits to the doctor's office, hospital charges and many other medical care expenses are covered at 100% after a small copayment such as $10 or $20 per visit. Generally, prescription drugs, routine physicals, lab tests, vision exams, well-baby care, and maternity visits are covered. HMO plans do not require you to pay an annual deductible before services are covered and usually have no lifetime maximums. HMO providers conveniently take care of most paperwork, so members do not have to complete claim forms.
Q: Are there any drawbacks to an HMO?
Some people who are accustomed to selecting their own health care providers and facilities find working with a Primary Care Physician system to be inconvenient or restrictive at first. However, HMO members who recognize the cost-savings, quality care and conveniences they enjoy with managed care are generally satisfied with the trade-off. No benefits are paid if a member decides to go to a health care provider that is not in the network.
Q: What is a Point-of-Service Plan (POS)?
A Point-of-Service Plan (POS) delivers health care services using both an HMO network and more traditional Indemnity coverage where individuals can utilize health care services outside the HMO network.
Q: How does a POS work?
At the time medical care is required, members decide to use either an In-Network or Out-Of-Network provider, In-Network managed care benefits are provided as an HMO (small copays, low out-of-pocket expenses and no deductibles, benefit maximums or claim forms). Out-Of-Network benefits are lower, out-of-pocket expenses are higher, and there may be a deductible, benefit maximums, and claim forms to complete.
Q: What are the advantages of a POS?
There is flexibility in choosing health care providers because benefits are paid for both In-Network and Out-Of-Network services. This gives members the opportunity to enjoy the advantages of managed care for most health care needs...and receive benefits for care from providers that are not in the HMO network.
Q: Are there any drawbacks to a POS?
Out-Of-Network benefits can be substantially lower than In-Network benefits and deductibles may apply, so out-of-pocket expenses will be higher.
Q: What is a PPO?
A PPO (Preferred Provider Organization) is a network of doctors, hospitals and other health care providers that have been contracted by an insurance company or health plan to provide care at a discount. PPO Plans have two benefit schedules -- one for In-Network and another for Out-Of-Network services.
Q: How does a PPO Plan work?
PPO subscribers are given a PPO directory, which lists participating health care providers. Any provider on the list may be used to take advantage of the PPO benefit schedule and discounted fees. Referrals are not required to visit a specialist. Reduced benefits, similar to traditional Indemnity insurance, are paid for utilization of Out-Of-Network health care providers.
Q: What are the advantages of a PPO Plan?
Because of negotiated discounts, out-of-pocket expenses can be kept reasonable by using PPO providers. There are no deductibles for some PPO benefits. There is flexibility in choosing health care providers because benefits are paid for both In-Network and Out-Of Network services. There is freedom of choice among In-Network providers, including specialists. When In-Network providers are used, out-of-pocket expenses are lower and no claim forms are required.
Q: Are there any drawbacks to a PPO Plan?
The value of a PPO plan depends on the availability of providers, by area, in the network. Claim forms are required for Out-Of-Network benefits.
Q: What is Indemnity insurance?
Indemnity insurance (sometimes called fee for service) is the traditional method whereby a health care provider is paid directly by the insured person for services. The insured person completes a claim form, submits it to the insurance company, and is reimbursed by the insurance company.
Q: How does an Indemnity Plan Work?
Insureds can select any health care provider they wish. They receive benefits based on their company's benefit schedule, after submitting a claim form.
Q: What are the advantages of an Indemnity Plan?
Indemnity Insurance gives the insured complete free choice of provider, the ability to change providers at any time and the ability to go to a specialist without first having to have the approval of a primary care physician, as is required by HMOs.
Q: Are there any drawbacks to Indemnity Insurance?
Because Indemnity Insurance offers the greatest flexibility and choice and no central cost management, it may have higher out-of-pocket expenses and premium rates. Annual deductibles apply and claim forms are required for services.
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