In these times of economic hardship, more and more people have to rethink their health care insurance plans and find the most cost effective way to protect themselves and their families. There are a variety of health insurance plans to consider, but ultimately your choice of plans will be based on your budget, your health care needs and what insurers can provide in your local area. First, you need to understand what the plans are and how they work.
An HMO, or Health Maintenance Organization, is a kind of a managed care organization where the doctors, hospitals, labs and other health care providers a member patient visits are under special contract and part of the HMO network. Unless there is a medical emergency, member patients require a referral from their personal physician within the HMO to see a specialist or other doctor (also within the network), and these referrals must be within the HMO’s guidelines of services and restrictions. HMOs may provide preventive care for low or no cost, but more expensive forms of care may not be covered. Experimental treatments or any treatment that is not medically necessary, such as elective plastic surgery, are almost never covered by an HMO.
On the other hand, a Preferred Provider Organization (or PPO), which is currently one of the most popular types of network-based health plans, not only defrays out of pocket medical costs, it is generally very simple to use and even gives plan members more flexibility in choosing their health and medical service providers. If they choose to visit a doctor, specialist or other medical service providers outside of the PPO network, they will still be covered — although likely paying more out of pocket to leave the network. Additionally, PPOs help contain costs for the health insurance company as well as help medical providers attract new patients because of their inclusion the network providers list.
Like the HMO, a PPO uses a network of doctors, hospitals, medical labs, pharmacies and other medical service providers who have agreed to both the cost controls and the network guidelines. These medical service providers are then listed on the network’s web sites and in publications and can rely on a steady stream of member patient customers. The insured patient will receive the widest range and most cost-effective coverage by using the medical providers on the network. But the patient does have the right to step out of the network to see another doctor or specialist with the understanding that they will still be covered for the visit but at a higher co-pay rate. An HMO does cover any medical services outside its network, except in very rare circumstances.
In every case, it’s up to the policyholder to educate him or herself about the rules of network for the health insurance provider they choose and what they can expect when the time comes to visit the doctor.
