A traditional indemnity health insurance plan or a managed care plan?

For many years, people felt they were caught between a traditional indemnity health insurance plan (a wide range of options and a high degree of security in case of accidents or serious illness that cost a lot of money) and a care plan managed care (a preventive medicine approach at relatively low cost but with severely limited options).

However, today it is possible to some degree to enjoy the benefits of both traditional indemnity insurance and managed care through a variation of the original Health Maintenance Organization (HMO) model known as the Health Maintenance Organization (HMO) model. of preferred providers (PPO).

A PPO is essentially an HMO, which means that the insurance company will establish a network of health care providers and, in exchange for relatively little cost, will encourage or, in some cases, require policyholders to seek treatment within the network. from the HMO. When treatment is performed outside of the HMO’s network, much, if not all, of the cost of such treatment is normally borne by the policyholder. However, in the case of a PPO, the rules for members who wish to seek care outside of the HMO’s network are relaxed.

Within an HMO, the policyholder is assigned a particular physician or primary care physician (often referred to as a “gatekeeper”) and the policyholder must go through the primary care physician for treatment. If, for example, the policyholder wishes to see a specialist, then he or she will need to be referred by the primary care physician and may or may not have a say in which particular specialist they will be referred to.

However, in a PPO a primary care physician is not assigned and therefore a referral is not required. Therefore, members are free to seek treatment through a specialist who is not a member of the HMO’s network, if they so desire.

Of course, this choice has cost implications, and members will almost certainly have to pay more for treatment with a doctor or facility that is outside the HMO’s network than they would if they sought treatment within the network. Unlike the HMO model, however, the PPO gives the policyholder a choice.

If desired, a PPO provides members with the low-cost managed health benefits of the HMO with the option to choose a greater variety, albeit at a higher cost, of indemnity insurance when it suits their needs.

It probably comes as no surprise to discover that traditional indemnity policies are fast disappearing today and that there are now twice as many people enrolled in PPOs as in HMOs.