Managed Care - What Are They Talking About?

What is a Managed Care Plan?

            Managed care is a way of linking your health care coverage with the health care providers you use. 

            care plan, you are considered an enrollee or subscriber. Enrollees receive their

            health care from a group of approved doctors and hospitals, called a provider

            network. Often enrollees in a managed care plan are assigned to a primary

            care doctor. The primary care doctor's job is to see that the enrollee receives

            routine medical care such as regular checkups. The primary care doctor is also

            the one who decides if the enrollee needs to see a specialist - a doctor or

            other health care provider who has special training in a particular area of

            medicine.

How Does Managed Care Save Money?

Unlike traditional plans, managed care plans contract directly with health care

            providers to set payment for services. To join a provider network, most

            doctors and hospitals give managed care plans a discount from their standard

            fees. Managed care plans then offer their enrollees incentives - such as lower

            out-of-pocket costs - to use the health care providers who are in the network.

            Managed care plans also keep costs down by restricting the use of more

      costly services such as hospital care or expensive medications or procedures/tests

of questionable value or are considered experimental..

What Are the Different Types of Managed Care Plans?

            There are two basic types of managed care plans: Health Maintenance

            Organizations (HMOs) and Preferred Provider Organizations (PPOs). The

            main difference between these two plans is that HMOs require their enrollees

            to receive all of their care from within the plan's network, while PPOs give

            enrollees the option of using providers either within or outside of the plan's

            network of providers. A third type of managed care plan, a Point of Service

            Plan (POS), is in some ways like an HMO and in other ways like a PPO.

             Health Maintenance Organization (HMO)

             An HMO offers a specific list of health services for a fixed monthly fee, or

            premium. Some HMOs employ their own doctors and operate their own

            clinics and hospitals. These are called staff model or closed panel HMOs.

            Another type of HMO allows its enrollees to see doctors in their private

            offices. This is known as an independent practice association or IPA.

Preferred Provider Organization (PPO)

             A PPO contracts with selected doctors and hospitals in the community. PPO

            enrollees can use the doctors and hospitals within this network or go outside of

            the network for care. However, the enrollee pays more for going outside of

            the network. For example, a PPO might pay 90 percent of the cost for a visit

            with a doctor within the network but only 70 percent of the cost for a visit with

            a doctor outside of the network.

             Point of Service Plan (POS)

             A POS plan is like an HMO in that enrollees are assigned to a primary care

            doctor from within the POS network. But like a PPO, POS enrollees can go

            out of the network for care by paying a larger share of the cost.

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