Is a Managed Care Network Right For YOU?
Managed health care has quickly become the most common type of health insurance in the United States. With health care costs almost constantly on the rise, managed care health insurance can offer a more affordable option to traditional fee-for-service (or indemnity) plans.
What is managed health care?
Managed care health insurance offers moderate health care coverage for a relatively low price. The cost of being able to pay less for coverage is hidden in the restrictions to choose your own care.
How it works.
The basic principal behind managed care newtorks is controlling costs by controlling care access. Managed health care plans differ widely in their details, but all will seek to steer a patient toward a pre-approved network of doctors and facilities, and limit coverage of any treatment sought outside the network.
Another difference lies in the type of care covered. Typically managed care plans cover the cost of preventative care such as annual check-ups and shots. Many medical treatments are also covered, but often you must follow a strict procedure before receiving health care from specialists or other physicians.
There are different types if managed care plans (which we discuss further down) and they all have different levels of cost and choice.
Your health insurance cost
If you follow the managed care plan requirements, most all of your doctor visits, checkups, and shots, should be fully or partially covered. However, managed care plans typically refuse to cover the entire cost of health care services provided by a physician or specialist not within the network.
Because of the restrictions, it is generally easier to predict the annual cost of health care under managed care plans than with an indemnity plan.
Here's, generally, what you can expect to pay:
- a monthly health insurance premium
If you go to a doctor within the health care network you will pay:
- a co-payment for certain health care services.
- a low per visit coinsurance, or percentage of medical costs.
If you choose to go outside the health care network you will pay:
- an annual deductible, before your insurance begins to contribute.
- a high per visit coinsurance, or percentage of medical costs.
- the difference between the cost of treatment and what the insurance company considers to be "reasonable and customary" for the service.
Three types of managed care plans
Managed care today is a lot different from its early days. Not least among the changes is the range of plans there are, with three main types: The three types are:
- PPO, or Preferred Provider Organization (very common)
- POS, or Point-of-Service (not very common)
- HMO, or Health Maintenance Organization (the original)
The basic characteristics of the first three are the same. Each health insurance company has an established network of providers from which they require or encourage you to seek care. In exchange for using certain health care providers, the cost to you in significantly lower.
The differences between each managed care plan lie mainly in the degree of compensation you will receive for medical treatment outside the managed care network.
It's a good idea to know the characteristics of each. I'll start with the HMO, then look at PPOs and POS plans.
