For just about every American today who has the responsibility of looking after a family, health care and medical costs is a major issue. But choosing the right health insurance plan can seem very complicated and confusing, especially if you have a very limited budget to work with. Ultimately your choice of a plan will be based on your budget, your health care needs and what insurers can provide in your local area. Determining that first will make it a little easier to understand the basics of the major types of health care insurance and managed care plans available and how they work.
A Managed Care Plan, or MCP, is a health care plan set up by health insurance organizations to help provide health care services less expensively by overseeing the use, quality and cost of the medical care. Probably the most well known and most controlled type of health insurance plan is the Health Maintenance Organization, or HMO. With an HMO plan, you must use the doctors, hospitals, labs or other medical facilities that are employed in the HMO’s network, and you will not be covered if you seek medical care outside this network. However, despite the restriction of choosing only from within the network, you can benefit from lower out-of-pocket costs since your co-pay will be minimal or at no cost at all when you need to avail yourself of medical services.
The managed care plan known as a Point of Service Plan (POS) is a little more flexible than the HMO and allows you to choose a doctor, hospital or medical service whenever you require medical care. A POS operates on the same principle as the HMO – that is, to receive full benefits of the plan, you must first choose a primary care physician from within the POS network to act as the overseer to direct and control your care. If necessary, this physician can refer you to a specialist, even outside the POS network. However, if you choose a health care provider that is not in the POS network, you will likely not be covered and paying the difference in cost will be your own responsibility.
One of the most popular managed care plans is Preferred Provider Organization, or PPO. This is a good option if the freedom of choosing your own physician, hospital or health care facility is important to and you don’t mind paying some of the costs. PPO plans usually come with deductibles (the amount you must pay before you can take advantage of your plan’s benefits) and may offer different plans ranging from full coverage (the most expensive) to higher deductibles, which are the least expensive. Upon enrolling in a PPO, you are encouraged to choose any doctor, health care facility or hospital on a “preferred providers” list. But you have the right to select a provider who is not on that list with the understanding that the plan will pay less and your out-of-pocket expense will be more.
