HMO
Health Maintenance Organization – As a rule, HMO’s provide the most comprehensive health care with emphasis on preventive services such as: routine office visits, physical exams, well baby care, immunization and well woman exams. HMO’s also feature low office visit co-payments and usually do not require the filing of claim forms, and the least out-of-pocket expenses. Claim forms usually are not necessary. Your out of pocket expenses are far lower and more predictable. Services provided by healthcare professionals outside the local network are not covered. Services provided by specialists, major diagnostics, hospitalization and surgery require a referral from your Primary Care Physician (PCP) and plan authorization. In California, HMOs are not allowed to have any pre-existing condition exclusion periods.
PPO
Preferred Provider Organization – The universe of healthcare providers is divided in two: contracting (Preferred Providers and non-contracting. You must always be aware of from whom your are receiving care; you are free to choose an non-contracting doctor or hospital, however you will pay an increased percentage of the cost.
You will usually have to pay a deductible and a co-insurance percentage payment with a PPO plan. It is more difficult to predict your out of pocket expenses and premiums are usually higher. You are also responsible to make sure pre-authorization is obtained for major diagnostics, hospitalizations and surgeries. Pre-existing condition exclusion periods run from 6 to 18 months.
EPO
Exclusive Provider Organization – This type of plan is hybrid between a PPO and an HMO. You must use only the contracted providers, however you are generally not restricted to a local medical group. Costs for services are usually in the form of co-payments, however there may also be percentage co-insurance costs for major services.
POS
Point of Service – These plans combine HMO primary care physician coordination with the PPO out-of-network benefits (it is literally an HMO plan with a PPO plan “glued” to it). Treatment authorized by primary care physician is covered at high, HMO-like benefit levels. You can get your medical care anywhere you want without getting referrals or prior approvals. Because you always have a choice (at time of service) between referred and self-directed care POS plans more costly to you than HMOs or PPOs.
Group vs. Individual
Sometimes individual medical plans appear to be more attractive than group medical plans, however there are a great many disadvantages in individual plans compared to group. Federal & State laws require group plans to cover all eligible individuals without regard to current health status or previous health history; individual plans may rate-up or decline persons based upon past or present health status, build, family history and even tobacco use.
Additionally, group plans have better coverage and lower out-of-pocket costs. Individual plans often have larger deductibles and percentage cost shares, as well as limited or no coverage for such services as prescriptions, pregnancy & maternity, mental health, or injuries due to specified hazardous activities.
