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| Health Insurance:
Insurance Systems |
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HMO
The HMO considered
being the most affordable system. The insured has to select a Primary
Care Physician (PCP) doctor from the plan’s directory. The PCP has
the authorization to refer patients to specialists, hospitals and other
service providers. If a patient seeks for a service without the PCP authorization
he/she may end up paying very high cost for this service, as the insurance
carrier may not cover it.
Advantages:
- Relatively
lower cost for major health services.
- Good HMO
system has the fine balance between cost and services.
- Most billing
and payment matters to health providers are taken care by the HMO management.
There is no need for frequent contact between the insured and the insurance
company.
- Patients
may not check before each office visit if their PCP is with the Insurance
IN NETWORK directory. If the PCP office is terminating the relationship
with the insurance company, they tend to notify the insured with the
change.
Disadvantages:
- Limited
health services. Insurance carriers tend to exclude high priced services
and new drugs from the HMO systems.
- Patient
cannot see a specialist without the PCP authorization. This process
is not always in the best interest of the patient.
- The IN-NETWORK
doctors’ directory is changing frequently. Insured may not be
able to get service from the same doctor for long time. Doctors may
choose not to participate with the HMO IN_NETWORK system if it pays
less than the PPO plans.
PPO
(Preferred Providers Organization)
The PPO is
a system that allows insured to choose their doctors and health facilities.
The monthly premiums are typically higher compared to the HMO, but it
has major advantages over the HMO system. As with the HMO, the IN-NETWORK
doctors and services are the most cost effective.
Advantages:
- Insured
are free to choose their doctors and health care facilities from the
PPO IN-NETWORK directory.
- Most doctors
prefer to work with PPO networks, their contacts with the health insurance
companies paid more compared to the HMO.
- More drugs
and high priced services are covered under the PPO system.
- The fact
that insured can choose their doctor may save them time and money by
getting service from specialists at the first time.
Disadvantages:
- Insured
have to deal directly with their health insurance and service providers
for billing issues. It takes time and effort to manage all the payments
matters.
- Insured
required checking before each office visits if the healthcare provider
accepts their insurance. In case that the service was not covered, or
the service provider was OUT-OF-NETWORK, it may be resulted with high
medical bills.
- PPO monthly
premiums typically cost more compared to the HMO plans.
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