There are a number of ways in which health insurance carriers provide coverage. Health insurance coverage can be quite complex, as it involves the coordination between a healthcare provider, the health insurance provider, and the actual person receiving care. Some of the methods of coverage include managed care, indemnity policies, and high-deductible plans.
Managed care is the most common form of health insurance coverage. Managed care coverage is administered by organizations that contract with health care providers to create an active network of participating providers. The three main components of managed care are preferred provider organizations, health maintenance organizations, and point of service plans.
Health maintenance organizations (HMOs)
Preferred provider organizations (PPOs)
Point-of-service (POS) plans
Health maintenance organizations (HMOs):
HMOs are groups of physicians, medical facilities, and healthcare services that work to keep patients under the care of providers within their network. Healthcare providers in HMOs coordinate a patient’s healthcare decisions and suggest a suitable hospital for urgent care. A primary care doctor to manage your care and refer you to specialists when you need one so the care is covered by the health plan; most HMOs will require a referral before you can see a specialist.
Because of the close-knit healthcare community in HMOs, members enrolled in these organizations tend to have limited provider options. The upside to HMO membership is that patients tend to pay less in deductibles and receive higher quality medical care coverage at facilities within the HMO network. With an HMO, you may have, the least amount of paperwork compared to other plans.
If you see a doctor who is not in the network, you may have to pay the full bill yourself. Emergency services at an out-of-network hospital must be covered at in-network rates, but non-participating doctors who have done treatment can bill.
Preferred Provider Organization (PPO):
PPOs operate off a list of preferred health care providers that patients can choose from for their coverage. Patients save the most money on their healthcare plans by selecting the preferred providers affiliated with a PPO. Providers on the preferred list are considered “in-network,” while those not on the preferred list is “out-of-network” providers.
The basic difference between HMO and PPO is that there is no need to get a referral from a primary care doctor to see a specialist. But there are higher out-of-pocket costs if you see out-of-network doctors vs. in-network providers
You will likely have to pay a higher deductible if you see an out-of-network doctor. Other costs: If your out-of-network doctor charges more than others in the area do, you may have to pay the balance after your insurance pays its share. There’s little to no paperwork with a PPO if you see an in-network doctor. If you use an out-of-network provider, you’ll have to pay the provider. Then you have to file a claim to get the PPO plan to pay you back.
Point-of-service (POS) plans
Point-of-service plans form a hybrid between PPOs and HMOs. As with HMOs, point-of-service plans allow you to select physicians and services from within a dedicated network of providers. Unlike HMOs, you have the option of coverage for care received from out-of-network providers. Note that patients in point-of-service plans have to get a referral before being covered by out-of-network providers, and they likely have to pay a deductible. Some HMOs offer point-of-service plans to people who want more options with their healthcare coverage.
If you go out-of-network, you have to pay your medical bill. Then you submit a claim to your POS plan to pay you back.
Exclusive Provider Organization (EPO)
EPO is a hybrid health insurance plan in which a primary care provider is not necessary, but health care providers must be seen within a predetermined network. Out-of-network care is not provided, and visits require pre-authorization. Doctors are paid as a function of care provided, as opposed to an HMO. Also, the payment scheme is usually a fee for service, in contrast to HMOs in which the health care provider is paid by capitation and receives a monthly fee, regardless of whether the patient is seen.
As mentioned in EPO, a moderate amount of freedom to choose your health care providers — more than an HMO; you do not have to get a referral from a primary care doctor to see a specialist. If you see a provider that is not in your plan’s network – other than in an emergency – you will have to pay the full cost yourself.
High-deductible plans have low premiums and high deductibles, which make them enticing to those who don’t want to pay for health insurance upfront. High-deductible plans may be a preferable coverage option for people with a clean bill of health who don’t anticipate requiring any medical services in the near future.
Health savings account (HSA)
Health reimbursement arrangement (HRA)
Health savings account (HSA):
HSAs allow people to pay for certain medical expenses (including expenses incurred before meeting a deductible) using non-taxed funds. Patients build their savings in an HSA by contributing a portion of their paycheck or other earnings on a regular basis. Funds that remain at the end of the year can often be rolled over to the next year. Furthermore, people with an HSA keep their funds once they leave a job and can continue contributing to their HSA with their next employer. However, there is a limit to the amount of earnings that can be contributed to an HSA.
Health reimbursement arrangement (HRA):
HRAs are different from HSAs in that employers, not the employees, contribute funds to the account that is used to offset healthcare costs. Employees lose their HRA funds if they leave or are terminated from a company, and any funds unused by the end of the year are no longer accessible in the following year.
We at MBC (Medicalbillersandcoders.com) have a complete understanding of Insurance Health Plans types which allows us to do accurate billing for healthcare providers. We can assure you increased cash flow. Please contact MedicalBillersandCoders.com today through email: firstname.lastname@example.org or reach us at our toll-free number: (888) 357 3226.
- Adam Felman (2018, 09 May), what is health insurance? Retrieved from https://www.medicalnewstoday.com/info/health-insurance
- Sarah Goodell (2018, July 24), Different Types of Health Plans: How They Compare. Retrieved from https://www.webmd.com/health-insurance/types-of-health-insurance-plans
- What’s the Difference Between an HMO, EPO, and PPO? Retrieved from https://www.cigna.com/individuals-families/understanding-insurance/hmo-ppo-epo