Health and Medical Insurance - Comparing Managed Care Health Plans

Health insurance plans have been forced to takerequire referral from the primary care provider.
action to contain costs of quality health careThis cost containment strategy is intended to
delivery as health care costs have skyrocketed.avoid duplication of services (for example, the
Health insurance premiums, deductibles andcardiologist ordering tests that have already been
co-pays have steadily increased, and healthdone by the PCP, or a sprained ankle being
insurance companies have implemented certainreferred to an orthopedic) and avoid unnecessary
strategies for reducing health care costs.specialist referrals, tests and/or procedures.
"Managed care" describes a group of stratgiesHMO and PPO plans also contain costs by requiring
aimed at reducing the costs of health care forprior approval, prior authorization, or
health insurance companies.pre-certification for many elective hospital
There are two basic types of managed careadmissions, surgeries, costly tests and imaging
plans; health maintenance organizations, or HMOs,procedures, durable medical equipment and
and preferred provider organizations, or PPOs. Soprescription drugs. When such services are
which health plan is best? How do you chooserequired, the provider must submit a request to
what type of health insurance best suits thethe health insurance plan review department,
health care needs of you and your family?along with medical records that justify the service.
Both HMOs and PPOs contain costs by contractingThe request is reviewed by the health insurance
with health providers for reduced rate on healthcompany to determine whether the services are
care services for its' members, often as much asjustified as "medically necessary" according to the
60%. One important difference between HMOshealth plan policy and guidelines. Review is usually
and PPOs is that PPOs often will cover the costsperformed by licensed nurses, and, if the
of care when the provider is out of theirreviewer agrees that the service is necessary,
network, but usually at a reduced rate. On theapproval is given and the service will be covered
other hand, most HMOs offer no coverage forby the health insurance plan.
health care services for out-of-network providers.As health care costs continue to rise, many
Both HMO and PPOs also control health care costsindemnity health insurance plans, or "fee for
by use of a gateway, or primary care providerservice" plans are being forced to adopt some
(PCP). Health insurance plan members are assignedmanaged care strategies in order to provide
(or select) a primary care practitioner (physician,quality health care and keep health insurance
physician assistant, or nurse practitioner). usually apremiums affordable. And as long as health care
family practitioner or internal medicine doctor forcosts continue to rise, the distinctions among PPO,
adult members or a pediatrician or family careHMO, FFS and other health insurance plans will
practitioner for childern. The primary care providerbecome blurred. Rest assured, however, that
is responsible for coordianting health delivery formanaged health care is here to stay.
plan members. Care by specialist physicians