What do PPOs, HMOs, and POS plans have in common? They’re all forms of managed health plans, and you need to be familiar with them when you shop for medical insurance. PPO means preferred provider organization; Health Maintenance Organization means health maintanence organization, and POS means Point of Service (POS). In general, managed care plans provide their members with medical from within a network of providers. In other words, members can only go to certain medical providers and hospitals that belong to or agree to participate with a specific network. Managed care plans also take care of claims processing that result from a medical service.
A health maintenance organization usually provides the least costly medical care. HMOs offer medical services in exchange for a fixed monthly premium. Thus, Health Maintenance Organization clients have no freedom to choose their own medical providers and hospitals and can only use providers in the Health Maintenance Organization network. Physicians belonging to a specific Health Maintenance Organization usually refer patients to other Health Maintenance Organization physician members, and a referral from an Health Maintenance Organization primary care physician is needed in order to see a specialist.
A preferred provider organization, or PPO, allows its members greater lattitude in choosing which medical providers they can see. Physicians within a PPO make referrals, but the members can refer themselves to medical providers and specialists including those outside of the plan. Thus,though members have the freedom to go outside of the PPO and will still receive coverage, they will pay more for seeing providers out side of the PPO network.
In a Point of Service (POS) plan , Primary care medical providers refer members to other medical providers, usually within the plan, but members can refer themselves outside of the plan, though they will pay more. If POS medical providers refer a patient outside of the plan, the POS usually pays most of the fee. Participants in these plans choose their own medical providers and hospitals, and can refer themselves to whatever physician or specialist they choose.
It is also vital to understand fee-for-service, or FFS, plans. These aren’t really managed care plans in the sense that there’s a pre-existing network of providers in place. Fee For Service plans are often much more costly in comparison to HMOs and PPOs. Thus, FFS plans allow participants greater lattitude in who they can see. FFS beneficiaries can choose what medical providers, and specialists they prefer to see and what hospitals they can go to. In an FFS, what determines what provider members use is whether or not the provider accepts the insurance. Normally, FFS plans require much more in out-of-pocket expenses and require members to pay in full up front and then file for reimbursement.
The plan you ultimately choose will depend on personal needs, whether or not you are single, married, married with children, whether or not the insurance is available in your geographical area, and of course, the amount of income available for medical insurance. One very vital point to remember is that medical insurance, as all insurance, is protection. The better you understand the kind of protection you need, the better your choice will suit your needs.