Understanding HMO, PPO and FFS Health Insurance Plans

Health insurance is offered in various forms today.network, though usually at a lower rate than
Traditionally, health insurance plans were indemnitygiven for network providers. HMOs usually offer
plans; the insured paid a premium, the physicianno coverage for out-of-network health care
provided health care services, the health insuranceproviders.Advantages of HMO/PPO plans typically
plan was billed, and the health insurance plan paidinclude lower health insurance premiums than
for covered services. As health care coststhose of traditional health insurance plans. HMOs
became astronomical, health insurance companiesand PPOs often offer coverage for preventive
developed different plans that were aimed atand health maintenance care not covered by
providing quality health care at affordable prices.indemnity plans. The health plan member is usually
Managed health care became the buzzword fornot required to file claims for health care services;
the health insurance industry, and health insurancecontract providers bill the health insurance plan
plans became more complicated.Healthdirectly.Disadvantages of these managed health
maintenance organizations, or HMOs, andcare plans include limiting coverage to providers in
preferred provider networks, or PPOs, havethe health care plan. Plan members must change
largely replaced the traditional indemnity healthprimary care providers if their provider is not in
plan. HMOs and PPOs utilize strategies to containthe health plan network. Many members do not
health care costs. These health plans are similar inwant to change health care providers. Another
certain ways. Both HMO and PPO plans contractdisadvantage is that prior approval/authorization
with health care providers to provide health careprocesses can be time-consuming and slow down
services at reduced rates for the health insurancethe delivery of needed health care services.
plan members. Typically both plans require the theSpecialty health care can only be accessed
member have a primary care provider, or PCP,through referral from the PCP.In summary, HMOs
who serves as a "gateway" to coordinate careand PPOs offer lower premiums and increased
for the member, and all specialty services arecoverage, but limit members to their network of
accessed by referral from the PCP. Both HMOsproviders. Indemnity plans allow the member to
and PPOs require that certain services andsee the health care provider of their choice, and
products, usually the more costly ones, beto access specialty care when they want, but
reviewed by the health insurance reviewers forusually pay higher premiums for health insurance
prior approval or prior authorization before thecoverage. Ultimately the health plan member must
service is rendered. The health care providerdecide whether choice of physician and access to
must submit justification for these services asspecialty care are worth the higher premiums.
"medically necessary", and the reviewerWhatever plan is chosen, it is vital for members
determines whether the service is a coveredto know their health insurance plan, including what
service. The plans do make provision forservices are covered and what providers are in
emergency situations that cannot wait for priornetwork.Kay Lowe holds a Master'd degree in
approval/authorization, but still require an approvalhealth care ahd has 30+ years in the health care
process.HMOs and PPOs differ in significant ways,field. She is also webmaster for
however. A PPO plan often covers servicesHealth-Infosource.com, a website dedicated to
rendered by providers that are not in the plandisseminating health information.