Although all health insurance plans must include certain features, the type of medical plan that you choose may treat visits to medical specialists in different ways. Depending on whether you have an HMO (health maintenance organization), POS (point of service) or PPO (preferred provider organization) plan, your employees may need to take different steps to ensure that their care is covered. Each insurance company also uses different rules to determine benefits for doctor visits, co-payments andother components of the plan. By thoroughly reviewing and comparing plan options, costs and benefits, you can select the right plan for your company and its employees.
In-Network and Out-of-Network Doctors
HMO, POS and PPO plans all maintain a list of preapproved doctors with whom they have pre-negotiated lower rates for care. These doctors are considered in-network, while doctors not on this list are out-of-network. Consistent across all plans, employees will pay more to see any out-of-network doctor.
Primary Care Physicians
Many HMOs require participants to select a primary care physician (PCP), who acts as a gatekeeper to any additional care. Generally, HMOs will have a tighter network of doctors approved as in-network PCPs. Employees who have long-standing relationships with specific doctors might find using a new HMO plan difficult because the doctor that they have been seeing may not be covered.
Similar to the HMO, a POS plan often requires employees to select a primary care physician for all routine care and referrals.
With a PPO health plan, employees are encouraged to select a primary care physician, but the plan won’t require the patient to see or get a referral from the PCP before seeing a medical specialist. PPOs generally offer the largest selection of in-network doctors, but the larger the network, the higher the premiums. PPOs are among the most expensive plans.
Seeing a Specialist
With an HMO or POS, the PCP often controls access to care. Employees see a PCP first and get a referral to see medical specialists such as dermatologists, oncologists and surgeons. As with primary care physicians, the HMO will limit which in-network specialists that employees can see.
Seeing a specialist with a PPO plan is quite different. While employees aren’t required to visit a PCP to get a referral for a specialist, they may have to directly contact the insurance carrier to get pre-authorization.
Co-Payments, Deductibles and Co-Insurance
Employees typically pay low out-of-pocket costs with an HMO as long as they stay within the network. If employees chose to go outside of the approved network for additional care, they should expect to pay a large percentage of the total medical costs.
With a POS plan, employees may have some out-of-pocket costs, but the costs are likely to be low. If the employee chooses to use an out-of-network physician, he or she will bear some of the cost and will be responsible for the claim paperwork necessary to recover any fees. This freedom to visit an out-of-network doctor while still having some of the costs covered is the core difference between an HMO and a POS plan.
In a PPO plan, out-of-pocket costs will be higher than with an HMO or POS plan. Routine care and specialist visits may all mean higher co-pays. To see an out-of-network doctor, employees will play less than they would with an HMO or POS plan, but they still will be accountable for a percentage of the costs.
HMO, POS and PPO plans all serve different needs. You’ll have to assess your employees’ needs against the costs of each plan when you select your health care plan. Generally, for anyone with well-established care needs and long-standing relationships with specific doctors and medical specialists, the additional cost of a PPO may be the best choice. If employees are comfortable with one PCP managing all care, however, then an HMO might be the right option. Frequently, POS plans are a popular middle ground between HMO and PPO plans. Educating your employees about the differences in plan types will go a long way toward helping them make the best use of their benefits.
Dylan Murray has an MBA from San Diego State University and a bachelor’s degree in communication from Boston University. He is a licensed insurance agent in California, but he works as a professional researcher and writer reporting on business trends in estate law, insurance and private security. Dylan has worked as a script analyst with the Sundance Institute and the Scriptwriters Network in Los Angeles. He lives in San Diego, California, and Marseille, France.