Medical Insurance Overview
In the United States there are two primary forms of private health-care coverage in the United States (this excludes Medicare and similar state law health-care systems for the indigent). There are health insurance policies and managed care plans.
Managed care plans greatly predominate over health insurance policies. Indeed, the differences between health insurance policies and the various forms of managed care plans continue to diminish. Both types of private health-care coverage are heavily regulated by the federal and state governments.
It is not unreasonable at present to characterize health-care coverage as something that no longer constitutes insurance in the traditional sense. Most of us in fact, no longer have health insurance per se, but rather, are members of, or subscribe to, a service plan under which they receive health-care services from a health maintenance organization (HMO) or some other form of managed care plan.
Traditional health indemnity policies, under which an insured paid his or her health-care provider, executed an assignment of benefits form in the provider’s favor, was billed for, and paid the doctor for the difference, are no longer in existence for all intents and purposes.
Managed care organizations include health maintenance organizations (HMOs), preferred provider organizations (PPOs), and other hybrid forms, including point of service plans (POSs). The purpose of managed care organizations, according to their enabling statutes, is to transfer the financial risks of health care from the patients to the managed care organization.
The principal defining factor of managed care organizations is that the managed care organization receives a fixed fee (usually monthly) from each patient enrolled under the terms of a contract to provide specified health care if needed.
The managed care organization keeps the fee even if a plan member never or rarely gets sick. Even if a member becomes expensively ill, the managed care organization is responsible if the costs exceed the fees paid. There are several models of managed care organizations.
There are staff model HMOs, in which the HMO owns and operates its own hospitals and facilities, and employs the doctors, nurses, and necessary personnel directly. There is the independent practice association model of HMO, in which the HMO contracts with individual physicians in private practice (and with hospitals), through which the HMO’s members receive medical services.
There is the group model of HMO, similar to the preceding model, except the HMO contracts with one or more—usually several—physician practice groups to provide services to members. A PPO is largely similar to a group model HMO.
Many health-care plans offer each participant two or more tiers of coverage, with varying benefit levels, copayments, and flexibility relative to appointments with specialists and receiving care from out of network Often the physician lists will be the same for all options.
Due to demand and costs of contracts between a medical group and a managed care organization, a medical group or individual physicians that were formerly available through the HMO option may, on a renewal of a plan (which usually occurs annually for employer sponsored plans), only be available under the PPO or POS option. Maintaining an ongoing physician-patient relationship with a doctor may be important to you.
Sometimes, but not always, when such changes occur, the plan and the physician will agree that preexisting patients under the HMO option can continue to use the physician as the primary care under the HMO level of coverages and copayments. If your plan does not, you may wish to consider exercising the PPO or POS option in order to be able to maintain your physician-patient relationship.
Another issue involving your choice of HMO, PPO, or POS depends on whether your plan requires females to go through a general practitioner or family practice or other primary care physician in order to obtain gynecological services. Many plans are beginning to recognize that female patients (legitimately) object to such a requirement.
They now permit females to visit their gynecologist for routine examinations on permitted intervals without getting a referral from the practitioner or family practice physician who otherwise is the gatekeeper to services by specialists.