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| Protecting Your Family and Property |
— Managed-Care Health Plans
Managed-care plans contract with networks of doctors, hospitals and other health-care providers to provide health services to those under the plan. Some of these plans expressly require the use of network providers for all routine care with exceptions for emergencies. Others will pay for care from any provider, but they offer financial incentives or discounts for using in-network doctors and hospitals.
Compared to fee-for-service, a managed-care plan provides increased affordability for comparable levels of coverage but reduces flexibility in choosing health-care providers. Managed-care networks allow in-network providers to charge lower rates because they have established a built-in clientele for their services. Managed-care plans also control costs by focusing more on preventive care to try to stave off more serious medical conditions that require costly treatments.
In addition, managed-care plans pay only for services considered “medically necessary,” and if they cover prescription drugs, there may be a formulary, or list, that specifies the medications it covers.
With so many options and kinds of managed-care plans, it can be confusing. In general, they can be separated into three basic types, each with a different level of provider choice:
With any managed-care plan, members are expected to pay premiums and deductibles just like with a fee-for-service plan. Coinsurance with managed-care plans applies only to POS and PPO plans for both in- and out-of-network care after the deductible is met. The main difference found with managed-care plans is the copayment. Copayments are small amounts the insured pays out-of-pocket with each doctor’s visit, prescription fulfillment or other covered health service. Similar to deductibles and coinsurance, most managed-care plans have a maximum amount an individual must pay within the plan period (generally a year), beyond which, the plan pays for 100 percent of the cost.
Rules for HMOs
Several nationwide safeguards and rules are in place that govern the practices of HMOs for the benefit of all parties involved:
Texas law provides additional protections, requiring HMOs to do the following:
Group vs. Individual Coverage
Managed-care plans contract with networks of doctors, hospitals and other health-care providers to provide health services to those under the plan. Some of these plans expressly require the use of network providers for all routine care with exceptions for emergencies. Others will pay for care from any provider, but they offer financial incentives or discounts for using in-network doctors and hospitals.
Compared to fee-for-service, a managed-care plan provides increased affordability for comparable levels of coverage but reduces flexibility in choosing health-care providers. Managed-care networks allow in-network providers to charge lower rates because they have established a built-in clientele for their services. Managed-care plans also control costs by focusing more on preventive care to try to stave off more serious medical conditions that require costly treatments.
In addition, managed-care plans pay only for services considered “medically necessary,” and if they cover prescription drugs, there may be a formulary, or list, that specifies the medications it covers.
With so many options and kinds of managed-care plans, it can be confusing. In general, they can be separated into three basic types, each with a different level of provider choice:
- Health maintenance organizations (HMOs) require members to get health care only from providers within the network. Exceptions include medical emergencies or necessary services not otherwise available in the network. When signing up for an HMO, you choose from a list of in-network doctors a primary-care physician who then oversees all of your medical care and provides specialist referrals. Often HMOs pay these primary-care doctors a set amount every month for each member on their list regardless of the covered services performed.
- Point-of-service (POS) usually is offered as an add-on to an HMO contract for an additional fee. It allows HMO members to use providers outside the HMO network without seeking a referral; however, it costs more to receive these services. Care for certain medical conditions may qualify for exclusion from this extra fee.
- Preferred provider organization (PPO) plans allow members to seek treatment from any provider, but using a provider in the PPO’s network costs less out of pocket. Notably, PPO plans do not require members to select a primary-care physician to oversee general medical care.
With any managed-care plan, members are expected to pay premiums and deductibles just like with a fee-for-service plan. Coinsurance with managed-care plans applies only to POS and PPO plans for both in- and out-of-network care after the deductible is met. The main difference found with managed-care plans is the copayment. Copayments are small amounts the insured pays out-of-pocket with each doctor’s visit, prescription fulfillment or other covered health service. Similar to deductibles and coinsurance, most managed-care plans have a maximum amount an individual must pay within the plan period (generally a year), beyond which, the plan pays for 100 percent of the cost.
Rules for HMOs
Several nationwide safeguards and rules are in place that govern the practices of HMOs for the benefit of all parties involved:
- HMOs must have in place a procedure for members to submit complaints, for those complaints to be resolved and for members to appeal decisions that leave them unsatisfied with the resolution.
- HMOs cannot cancel services for, or retaliate against, any involved party (i.e., group contract holder, doctor or patient) who files a complaint or appeals an HMO’s decisions.
- HMOs may not prevent doctors from talking to members about their medical condition, treatment options and terms of the health-care plan, including how to appeal a decision.
- HMOs may not provide financial rewards or incentives to doctors for withholding necessary care.
Texas law provides additional protections, requiring HMOs to do the following:
- HMOs must have adequate personnel and facilities available within a certain mileage from your home, residence or workplace.
- HMOs must allow referrals to out-of-network providers for medically necessary covered services not available in the network.
- Under certain circumstances, HMOs must allow members with chronic, disabling or life-threatening illnesses to list a specialist as their primary-care physician.
- HMOs must allow members to continue seeing providers that leave the network while the patient is under their care for a period of time under special circumstances, such as terminal illness, disability, life-threatening condition or pregnancy if the provider agrees to continue with the HMO-contracted rate.
- HMOs must pay for emergency care that someone with an “average knowledge of medicine and health” would consider in serious need of immediate medical attention until such a time that the patient’s condition is stabilized enough for them to be moved to the care of a network facility and physician.
Group vs. Individual Coverage
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