If you are searching for a medical insurance plan, here is what you need to know. The two principal types of managed-care plans are HMO (Health Maintenance Organization), and PPO (Preferred Provider Organization). These managed-care plans were created to reduce costs while maintaining the quality of care.
The managed-care plans have grown in popularity in recent years over traditional plans, which is a fee-based coverage that is provided whether it is hospital or provider. When choosing a managed-care plan, the total health care costs should be considered, which include premiums and out of pockets expenses such as deductibles, coinsurance, and copayments.
Premiums are the sum of money paid by individuals to secure an insurance policy. If premiums are not paid, the insurance policy may be canceled. Premiums are used by insurers to pay for claims, invest for higher returns, and cover liabilities required by the policy.
However, if your primary physician is outside your insurer network, you could pay 100% of the cost of the claim. HMO generally have lower premiums, out of pocket cost and deductibles. When the policy ends, premiums may go up. The premium price will depend on a number of factors such as:
- Coverage type
- Your location
Your lifestyle, such as smoking
A deductible is an amount paid for health coverage before the member insurance plans kicks-in. For instance, If your deductible is $5,000, then the $5,000 must be paid first. You can choose the amount of deductible you wish to pay when you sign up.
Many managed-care plans pay for services, like disease management programs and checkups before the deductible is met. Some managed-care plans have deductibles that are separate, such as prescription drugs. All managed-care plans pay preventive benefits in full before the deductible is met.
Insurers provide plans for families with deductibles for each family member and individual plan with deductibles for individuals.
HMOs have little or no deductibles, but they put restrictions on your choice of healthcare providers. PPO plans do not have restrictions on the choice of healthcare providers, and referrals are not required even for specialists.
Copayments and Coinsurance
Copayments and coinsurance are payments made once you reach your deductible. Your out-of-pocket maximums are the most you will spend in a year, thereafter your insurer pays 100%. HMO plans and non-preventive care, normally have copayments.
HMO vs PPO
The difference in economic and quality of life outcomes between PPOs and HMOs are network size, cost, out-of-network coverage, and the ability to consult with specialists. The distinct differences include the following:
- More affordable, with little or no deductible, lower premiums, and few copays.
- Requires referrals to consult with specialists.
- If your preferred doctor is out of network, you must pay the cost of the visit.
- An approved list of specialists and physicians are provided.
- Members have more flexibility in choosing a hospital or a doctor
- Fewer restrictions in consulting with out-of-network providers
- Most companies offer PPO plans.
Primary Care Physician
HMO plans usually require that you choose a PCP (Primary Care Physician). This PCP is typically a part of a network or group system. HMOs restrict referrals as a means to reduce costs by having one provider coordinating care to ensure that specialized care is necessary.
About Frederick Health
Frederick Health is one of the leading healthcare providers in the Maryland area. Their goals are to make healthcare easier, simpler, and more cohesive by bringing manage care to a place where patients get the most from both types of care.
Frederick Health offers primary care, a wide variety of specialties services, and family medicine. Their staff of physicians and nurses work close to provide the best care for their patients. Their goals are to make healthcare easier, simpler cohesive approach to managed-care by moving to one name. Some of the previous names included FMH, FMH Home Health and FMH Rehab, Frederick Regional Health System, and Frederick Memorial Hospital.