Types of Managed Care Health Insurance Plans

1. Health Maintenance Organizations (HMOs) are the most familiar form of managed
care plans. HMO members pay a fixed dollar amount,usually monthly, which gives
them access to a wide range of healthcare services. Members pay a predetermined
fee or co-payment for each hospital visit, doctor, or emergency room visit, and
for prescription drugs, rather than paying the provider in full and obtaining a
portion of the reimbursement later. HMOs generally eliminate the need to file claims.

When you enroll in an HMO, you must select a primary care physician (PCP) to manage
your healthcare. With a few exceptions, you must first consult with your PCP for
healthcare needs. If necessary, your PCP may refer you to an HMO approved specialist.
If you do not get approval from your PCP before you seek medical care, you may be
responsible for payment for those services. As HMO carriers continue to seek ways to
contain costs while responding to consumers’ changing needs for healthcare services
and benefits, HMO plan designs also continue to change. Some of the newer plan designs may offer more services without PCP approval,and/or different forms of cost-sharing, including the requirement for an enrollee to pay an annual deductible for certain services rather than a copayment for each specific service.

2.Preferred Provider Organization (PPO) plans issued by an insurance company are
plans that provide higher reimbursement if you go to a “preferred” or “participating”
provider that provides services to health plan members for discounted fees. Insured
individuals choose who will provide their health services, but they pay less
in out-of-pocket expenses with a preferred (participating) provider than with
a nonpreferred (non-participating) provider.