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What are the differences between an HMO, a
PPO and a POS?
HMO (Health Maintenance Organization) Coverage:
An HMO is a prepaid health plan. For your monthly premium,
the HMO provides medical care for the insured. This includes regular doctors'
visits, lab tests, x-rays, hospital stays, emergency care, surgery, and therapy.
Care is usually provided either through doctors and other health care professionals
under contract or directly in its own group practice. Kaiser Permanente is one of
the most popular and prominent plans. You may choose a doctor that works
for Kaiser in one of their facilities, or you may choose from a list of independent
providers that practice outside Kaiser in their own office. In general, HMO's
provide overall better benefits than other types of health plans.
PPO (Preferred Provider Organization) Coverage:
A mix between traditional fee-for-service and an HMO. Like HMO plans, there are
specific doctors and hospitals to choose from. In a PPO, you can chose to use doctors
who are not part of the plan and still receive some coverage. This type of plan
is well suited for people who want an HMO type prepaid plan, but want to use
a their own doctor or a doctor that is not part of the network. Like HMO's,
these plans are geared towards preventative health care and include a wide range
of services
POS (Point-of-Service) Coverage:
Point-of-Service medical plans are a combination of a HMO and an
PPO. POS plans are designed to provide lower cost medical care to those that remain
in the network. With the POS plans, if you seek medical care outside of the network,
you will be responsible for full payment. However, if your Primary Care Physician
gives a referral for you to see a specialist outside of the network, the insurer
will pick up most of the cost. The biggest difference between a POS and PPO
plan is that the Point-of-Service plan makes use of a Primary Care Physician.
As with HMO plans, POS plans usually include health improvement programs and
preventive care.
What Should I pick, HMO or PPO?
HMO plans will have co-pays for most services and 100% coverage for many
others as long as you abide by certain guidelines. Access to providers is limited
to a group of physicians who will provide you the care you need. Referrals from
a primary physician are often required. No benefits for seeing providers outside
the group unless approved are available. In exchange for paying higher copays and/or
a percentage of other services, PPO plans allow direct access to a statewide network
of doctors and hospitals without referrals. Some benefit is provided when seeing
providers outside the network. Depending on the plan there can be a substantial
savings in premium over an HMO plan.
What should I be looking for
in an HMO?
You want to make sure your physician is a listed Primary Physician and that
the provider group has a good selection of specialists in every specialty. (If you
needed a Podiatrist will your primary physician have a choice of specialists
to refer you to). You may want to contact your doctor's office to see what
their experience is with the HMO you are considering.
What Deductible or Copay should I choose in a PPO
plan?
If you decide on a PPO plan you'll have choices between plans with small
copays and no deductibles, and plans with no copays and large deductibles and combination
of both. Most carriers have two or maybe three "good values" in their portfolio
of plans. Though a plan may have superior benefits over another, the difference
in premium may be more than the benefit received. "Why give an insurance carrier
more money if it is not likely that you will ever get it back out." To help you
decide, run three scenarios by each plan you are considering (your typical year
of medical treatment, a year of greater usage, and a catastrophic year). Please
use our worksheet to help you. Also keep in mind, the plan you obtain today maybe
the plan you will have for a very long time. If you want to upgrade your coverage
later, you will have to submit an application for medical evaluation and it could
be turned down. If you are having a difficult time deciding between two plans you
may want to apply for the richer plan now. You can in most cases downgrade later.
About Pre-Existing Conditions and the Application Process:
The insurance carrier's we represent cover pre-existing conditions subject to the
application being approved. In California the Insurance company has the right to
decline an application based on the medical information on the application. If you
have been a prior member with the company, they may review past claims. To learn
more about your health conditions listed on the application, underwriters may request
information from doctors, hospitals and other providers. The underwriter can also
approve the application but charge an additional premium based on your medical history.
If you are approved coverage and have not had insurance coverage within the last
62 days, there could be a waiting period for pre-existing condition coverage. Your
deposit money is refundable and there is no obligation to accept an offer of coverage.
Things you should know about COBRA/Cal-Cobra
Many people we are in contact with are either coming on or off cobra. Cobra is in
most cases 18 months of extended group coverage beyond the date a person leaves
a job. Since the ex-employee is paying the entire premium, the coverage is often
expensive. I recommend that those on Cobra get off it sooner than later and that
those who can elect COBRA to do so, or at least keep the option open, but also seek
individual insurance simultaneously. Cobra will run out eventually, and if you develop
a pre-existing condition while on Cobra you may have difficulty obtaining affordable
coverage later
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