Managed Health Care Plans: An Overview

By Compuquotes Team on August 7th, 2008

Health Insurance

With half a dozen different options for managed care, it's difficult to know which to choose. Each type of plan has specific benefits for different types of people, so it's important to know which is right for you.

  • Health Maintenance Organizations

HMOs typically provide insurance to employer groups, and are able to offer inexpensive healthcare by dealing with large volumes of people. HMO plans tend to offer the lowest premiums, but this is at the cost of flexibility for the consumer. With these plans, the user must visit doctors on the HMO's network list of preferred providers to take advantage of insurance. In addition, they may not self-refer to specialists, but must instead be referred by their primary care doctor. HMO plans tend to suit people who want low-cost healthcare, don't have specialized medical needs, and who are happy to visit network providers.

  • Preferred Provider Organizations

PPO plans fully cover the costs of healthcare provided by network healthcare professionals. However, PPO plans also offer users the option to choose to visit non-network providers, and to visit specialists without a doctor's referral. However, when visiting non-network providers, insurance does not cover all the costs of the visit. PPO plans will suit people who want low-cost healthcare that provides them with some flexibility when choosing the healthcare providers they visit.

  • Fee For Service Plans

FFS plans include a low monthly premium and virtually unrestricted choice in terms of healthcare professionals the user decides to visit. However, each visit requires a co-payment of around 20% of the cost of the visit. In addition, an FFS plan includes a yearly deductible. These plans are most suited to people who are usually healthy but want health insurance for the protection it provides in emergency situations.

  • Point of Service Plans

POS plans are another type of highly flexible healthcare plan which allows users to retain the ability to choose between network and non-network providers. Users must choose a primary care doctor, and pay co-payments and a deductible for non-network visits. In addition policy holders can also self-refer to specialists, even those outside the network. POS plans most suit people who want flexible healthcare that allows them to keep costs down by choosing network healthcare, but still retain the option of choosing a non-network provider if necessary.

  • Self-Directed Health Plans

SDHPs focus on providing preventative healthcare. The SDHP owner has access to a savings account that the insurer contributes to on a quarterly basis. The funds in the account are used to cover the costs of preventative healthcare such as physical exams and check-ups, diagnostic and screening services, immunizations, and home visits. These plans are most suited to people who are generally healthy, and have few healthcare needs apart from preventative care.

  • Health Savings Accounts

HSAs combine a savings and investment account with a high-deductible health plan. The savings account can be used to pay deductible and co-payment requirements for the health plan. Users also have the added benefit of tax-free investment earnings and income tax reduction from contributions made using pre-tax dollars. Another advantage of HSAs is the much more extensive list of expenses covered by the account, which includes alternative therapies such as homeopathy, nonprescription drugs, and even healthcare-related travel expenses. The flexibility of HSAs means they suit almost anyone, including people with long-term medical expenses as well as those with few ongoing costs.

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