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- Health insurance providers decide the type of managed care for their plans.
- Health insurance providers must meet the requirements for qualified health insurance in the Affordable Care Act
- The law leaves it to private companies to design the plans they sell on the Obamacare Marketplace
- Insurers have freedom to choose the type of managed care they will provide to the public
The type of management in a plan can make a big difference in the level of services, the size of the network, and costs of benefits. The common feature of all plans is the provider’s network. The network is the group of medical care providers that the insurance provider pays to serve a plan’s subscribers. The type of managed care can restrict the subscribers to a network.
Further, some plans require the involvement of a primary care physician to provide care and refer subscribers to other network resources.
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What does HMO mean?
The designation HMO indicates some important things for a consumer. The consumer can expect low prices for services with low out-of-pocket expenses. HMO plans are often lower in price than comparable PPO plans because they do not pay for outside services.
The HMO model negotiates low prices with doctors and hospitals in its network and promises to send them high volumes of patients. The below-listed items describe the important features of the HMO.
– Primary Care Physician
the HMO relies upon an assigned doctor to manage care for each patient. This doctor is the primary medical care provider. He or she makes referrals to other network resources. The consumer gains the advantage of the physician’s care and advice. The consumer loses the flexibility to make referrals and use network resources.
The primary care physician must agree to requests for services and referrals. The label HMO also indicates that consumers will get little or no support if they choose providers outside of the network.
– Network Expenses
The HMO does not credit outside towards the policy limits for deductibles and out-of-pocket expenses. The exclusion of outside spending means that the insurance provider will be less likely to pay the maximum amount on the policy. Once consumers pass the expense or deductible limit, the insurer must cover the entire costs of the covered benefits.
The Obamacare individual mandate requires every eligible resident to get and keep qualified health insurance coverage. The law does not determine the type or amount of coverage beyond the below-listed elements of qualified care.
- Minimum actuarial value of 60 percent
- Minimum essential coverage
- Offers essential health benefits
- Provides limits on costs and expenses
HMO and Types of Managed Care
The HMO was one of the early types of managed care; it was distinguished by a major commitment to preventing illnesses rather than simply treating them. Most managed care systems have some of the elements of the HMO. The below-listed items provide descriptions of HMO and the other major types of managed care.
– HMO: The Health Maintenance Organization
This type of managed care emphasizes prevention and a simple network to handle subscriber needs. The HMO offers savings below market rates for subscribers that use network services. The HMO uses a primary care physician to provide and refer network services. The HMO does not cover outside network services with cost sharing payments.
– PPO: Preferred Provider Organization.
This type of managed care uses a network and offers incentives for subscribers to use in-network rather than outside resources. The PPO does not use a primary care physician and subscribers can self-refer to network specialists.
PPOs are great choices for people who rely on specialized treatment and medical services from healthcare specialists such as dermatologists.
– EPO: Exclusive Provider Organization
This type of managed care uses a network and does not cover services outside of the network. The EPO offers low prices in exchange for subscriber loyalty. They often have simple networks and low copays, and higher levels of cost sharing than other plans.
– POS: Point of Service
Point of Service plans combine some qualities of the HMO and the PPO. The POS requires a primary care physician, and it permits the use of outside resources. The POS will cover the use of outside resources when the primary care physician makes a referral.
– FFFS: Fixed Fee for Services
Original Medicare is an excellent example of this type of care. The Centers for Medicare and Medicaid sets prices for services that it will pay to medical care providers that accept Medicare. The subscriber may have to pay the balance, or the provider may accept the Medicare payment in full and final settlement of the claim.
HMO Crosses Obamacare Tiers
The Affordable Care Act classifies qualified health plans by the percentage of benefits they cover. This convenient system puts plans in groupings that have similar actuarial values.
The four Obamacare types of policies rank from 90 percent coverage with Platinum plans to 60 percent coverage with Bronze plans. Gold plans cover 80 percent, and Silver plans cover 70 percent of the costs of covered benefits.
Networks and Costs
When consumers use services outside of their plan network, they can encumber the costs of the service. Some plans, particularly POS and PPO types, can offer limited costs sharing for outside resources.
The funds spent by consumers outside of plan networks do not count towards the overall expense limits in the plans or the Obamacare rules.
The outcomes for consumers can be quite different depending on whether they need or choose services outside the provider’s network. Without cost sharing, consumers must bear the entire costs of outside services; this pattern can accumulate large amounts of medical debt.
HMO is a Widely-Used Type of Care
The HMO is the most common form of managed care on the Marketplace followed closely by the PPO. Current trends in health insurance point to costs and consumer value. Consumers resist high priced policies with high deductibles.
Plans seem to offer less, cost more, and leave more expenses for the consumer’s account. Many feel they pay far too much in premiums for policies in which benefits are out of reach because of high deductibles.
For some users, the most used benefits are the no cost prevention features such as annual physical, screening, vaccines, and tests.
Comparison shopping offers an opportunity to focus the search on the most important features such as costs and deductibles. Enter your zip code below and get FREE private health insurance quotes to compare today!
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