Managed Care Health Plans

Managed Care health plans are types of health plans that are quite opposite to Indemnity Health plans or Open Choice health plans. In case of Managed Care Health plans, individuals  do not have complete freedom in choosing their physicians but must select from a list of in-network/participating providers.  Managed Care plans mean controlled access to doctors, clinics, hospitals, procedures, and medicines. These plans can called Defined Benefit Health programs.

In spite of so many limitations, Managed Care Health plans are very popular. In general, managed care plans are better suited for the average individuals because these types of health plans are more cost effective in the long run. In fact, this is an age of Managed Care Health plans in the world of health insurance plans. This is because maximum benefits are available in Managed Care Health plans at minimum costs. Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), and Point of Service (POS) plans are known as Managed Care Health plans.  

Preferred Provider Organization

Preferred Provider Organization (PPO) plans are an affordable and popular option for family health insurance because they are comprehensive and flexible. Subscribers will save money covering their family when they use preferred network physicians but a PPO also provides them with coverage on out-of-network doctors as well.

PPO health insurance allows substantial discounts from providers who are within the network. Deductibles must be paid before the insurance companies start giving benefits. That is, after annual deductible amount are paid, insurance company will start cost sharing of medical expenses of the subscribers. For example, if the medical cost is $100 and cost sharing rate is 80%/20%, the insurance company will give 80 dollars and the subscriber will pay 20 dollars from his pocket.

PPO health insurance is usually the least expensive of managed care health insurance because the patient picks up a substantial portion of the “first dollars” coverage with a higher deductible.  The higher the deductible is,  the lower is  the premium.

Health Maintenance Organization

A Health Maintenance Organization (HMO) is one of the more affordable individual health insurance alternatives. HMOs usually have an extensive network of doctors, specialists, hospitals, and clinics. HMO networks often encompass a wide and varying range of healthcare professionals. Subscribers will have convenient access to all their healthcare needs.

Each subscriber/member  chooses a primary care physician (PCP) who sees to the overall care of that member. Specialists and non-emergency hospital admissions usually require a referral from a PCP.

Point of Service

Point of Service (POS) plans are essentially a mixture of the HMO and PPO. Like an HMO subscriber can pick a primary care physician but as in a PPO,  they can seek help from any medical professional in or out-of-network and they will still be covered.

POS plans are still managed care resulting in lowered medical costs in return for more limited choices. Point of Service health insurance is sometimes called an open ended HMO or PPO. The major difference though is policyholders are allowed to seek help outside the POS network though there is more of an incentive to choose providers within the network.

POS members choose a primary care physician (PCP) as they would in other managed care health care plans. From there the doctor becomes the insured’s “point of service” and will refer the insured to other healthcare providers.