Question

1. Discuss the different types of managed care plans.
2. Compare and contrast HMO versus PPO. What are their pros and cons?

Answer 1

There are basically 4 types of managed care plans

• Health Maintenance Organization (HMO)
• Preferred Provider Organization (PPO)
• Point of Service Plan (POS)
• Exclusive Provider Organization (EPO)

Difference in HMO and PPO plan

HMO plans are basically those in which the network of healthcare providers, agree to provide services at lower prices negotiated by an insurance company.
HMO Plan

• This plan uses in-network providers only
• It has gate keeping
• Here the providers get paid under capitation mostly

On the other hand,PPP plans are those in which the network of healthcare providers, provide its members with multiple choices regarding healthcare

PPO Plan

• This plan uses both in-network and out-of network providers as well
• It does not have gate keeping
• Here,the providers get paid in accordance to the discounted fee schedules

Pros and Cons of HMO plan and PPO plan

HMO plan
Pros

• Less premiums to be paid
• No deductibles
• Emergency care is covered even of it is out-of-network
• PCP manages healthcare

Cons

• You have to choose a PCP
• smaller network of doctors
• PCP decides which specialist you can see

PPO plan
Pros

• It has larger network
• Can go out of network
• No need of referral
• Can use any hospital,doctor or specialist

Cons

• Premium are much higher
• Deducible