The Nuts and Bolts of Managed Care
Managed care is a general term for many different types of health insurance coverage. It has many names and labels such as health maintenance organizations (HMO), preferred provider organizations (PPO), and point-of-service (POS) plans.
If you choose to participate in an HMO, you are required to obtain care from a specific list of physicians, hospitals or other healthcare providers.
There is more of choice offered in a PPO. It is similar to an HMO except that you can choose to seek care from a provider who is not part of the plan. However, if you do so, you will have to pay more than if you went to a provider who was a part of the PPO.
A point-of-service managed care plan is a blending of an HMO and a PPO.
Because there are many variations in managed care plans, it is important to look closely at:
- the benefits provided
- the costs you are responsible for
- the restrictions on choosing providers (doctors and hospitals)
The "Gatekeeper" Concept
Under some managed care plans, you may be required to select a primary care physician from a group of participating doctors and to use this physician as the "first stop" for preventive and illness-related healthcare. Then, if necessary, you and your primary care physician decide if you need to see a specialist (such as a cardiologist) who is a participating provider within the managed care plan. In this case, the primary care physician is called the "gatekeeper" since he or she is the physician you must see first for your medical care.
How Payments Are Made
Most managed care plans require you to contribute a co-payment, a cost-sharing arrangement in which you pay a specified charge (usually $5 or $10) for specific services such as a doctor's visit. After paying this, you usually are not required to fill out any forms, and the doctors, hospitals, and other providers are paid directly by the managed care plan. In addition, you generally pay a fixed amount for prescriptions if you choose a managed care plan.
With managed care plans, there is usually less paperwork, and you know up front how much you will be responsible for paying for your healthcare services. However, you may be limited in your choice of doctors, hospitals and other healthcare providers.