When shopping for individual health insurance, you must select among the different types of managed care plans. Managed care is a medical delivery system that aims to manage the quality and cost of medical services an individual receives.
Almost all modern health insurance falls within four categories of managed care:
- Health Maintenance Organization (HMO)
- Preferred Provider Organizations (PPO)
- Exclusive provider organization (EPO)
- Point of Service (POS)
Each plan differs from one another in the number of providers a patient can choose from, if the patient must choose from the plan’s network of doctors, hospitals, pharmacies, etc., or is limited to a primary care physician (PCP), and whether or not out-of-network care is covered.
HMO: Health Maintenance Organization
An HMO is a network or organization that provides health insurance coverage for a monthly or annual fee. These plans often provide integrated care and focus on prevention and wellness. While HMO plans typically have lower premiums than PPOs, they may include certain member guidelines.
For example, members must first receive medical care from their designated PCP, who will then refer them to a specialist within the plan’s network of providers. Other restrictions include living or working in its service area to be eligible for coverage. Likewise, an HMO plan won’t cover out-of-network care except for emergencies.
PPO: Preferred Provider Organization
A PPO plan, like an HMO, offers a network of healthcare providers. But, it does not restrict members to that network, permitting them to use any doctors, hospitals, and specialists outside the network. Furthermore, PPO plans do not require members to choose a PCP.
For instance, if you find yourself in a situation where you need medical care from a specialist, you could seek another healthcare provider for that particular need while still receiving care from your regular provider.
Note that though members don’t need a referral to receive care outside their network, there is an additional cost. Likewise, monthly premiums are typically higher, and copays for office visits cost more.
EPO: Exclusive Provider Organization
EPO plans are similar to PPOs and HMOs. Like a PPO, you have the freedom to choose your own doctor from among a preapproved network.
When you receive medical care from doctors, specialists, or hospitals within the plan’s network, the insurance company helps pay for a portion of the bill, and you pay what’s left based on your deductible. Likewise, you usually are not required to go through a PCP before seeing a specialist.
However, like an HMO, an EPO will not pay for out-of-network care if you receive treatment outside that network. In these cases, you are responsible for covering the entire cost, except for emergencies.
POS: Point of Service
This final plan type is the least popular among Americans – in fact, as of 2022, only 4% of Marketplace plans were POS plans. In a POS plan, members are (typically) required to choose a PCP to get referrals to see specialists. While members can use out-of-network care after receiving a referral, it is more expensive than seeing doctors, hospitals, and providers within the network.
Selecting the Right Managed Care Plan
When choosing between the different types of managed care plans, you should consider factors like access to providers, out-of-network medical care, and the necessity of referrals. Where you live can also affect the network of providers you will have access to.
Antidote can help disambiguate the differences between the varying managed care plans, empowering you to make the best choice concerning your medical and budgetary needs.
