Lost in the alphabet soup of insurance?
Understanding HMO/POS/PPO
HMO: Health Maintance Organization. This is a closed set or network of health care providers providing service to the insured. In order to access all the providers in the network the insured must have a “primary” (begrudgingly referred to ad a gate keeper) physician. This is the physician the client must see for all initial health care visits. If a specialist is required the “primary” physician will refer the client to a specialist within the network. This generally works well for the HMO with a large localized network. This type of coverage does not have “out-of-network” benefits. If you (the insured) see a physician not in the network or without a referral you will be responsible for 100% of the costs. HMO’s were originally designed to administer or “manage” the cost of health insurance. HMO networks are often localized into regions i.e. the Triad or the Triangle.
POS: Point of Service. This is a network of health care providers providing service to the insured. Similar to the HMO the client has a primary physician and refers the patient to other specialists as needed. Unlike the HMO, the benefits provided by this plan designed to allow clients to seek service outside the network. The benefits provided to the insured receiving out of network services are lower than the benefits received by the insured that receives services using health care providers within the network. Most POS networks provide in-state service only.
PPO: Preferred Provider Organization. This network is perhaps the most user friendly of all provider networks. Like the POS (point of service) Network the PPO provides in and out of network benefits. Unlike the POS the PPO is usually designed to cover clients traveling or visiting in other states. If a person needs to access the PPO network usually all it takes is a phone call to the carrier to locate a PPO network provider.
No matter what the design of your group health insurance, Emergency medical attention is covered as an in network expense.
As an employer choosing benefit designs for your company it is important to keep in mind the needs of your employees. If your company is small and all employees are based locally, it may be more cost effective to use a local HMO. On the other hand, if your company has one or more employees living, working or traveling out of state, a PPO would be a more comprehensive plan design for your company.