Employer-sponsored healthcare plans are available in many different types and levels of coverage in order to meet the diverse needs of employees. However, it is evident that some of these plans require significant out of pocket costs for employees, with limited coverage and reduced quality of care. Some employers offer several options across different segments, while others provide the same package with different deductibles and coverage limits. Therefore, it is important to identify these differences and evaluate some of the features of these packages in order to determine value and limitations. These plans are essential components of the benefit packages provided by the organization for its employees. The following discussion will address these plans in greater detail and will describe some of their benefits to determine how employees benefit from these plans, in addition to their level of liability.
The organization offers two primary managed care plans. One is an HMO plan and the other is a PPO plan, each of which has their advantages and disadvantages. These plans have different options for employees that are determined to be positive or negative in the context of an individual’s specific needs. The HMO plan allows patients to see any doctor within the network for the required copay. However, all referrals must be initiated by the primary care physician and are subject to approval by the managed care organization. The HMO plan does not provide any significant coverage for services that are utilized out of the network. In addition, there is no charge for inpatient services at the in-network hospital of choice, while only partial costs are covered for out of network inpatient services. These offerings are limiting in some ways for patients who may require a number of specialists, particularly since referrals from the primary care physician are required on a regular basis.
The PPO plan is more relaxed and has fewer restrictions, particularly if physicians within the network are utilized. With this plan, no referrals are required and a patient can see a specialist without having to go through the primary care physician. In addition, most services are covered and require only copays. However, for more expanded services that are out of the network, there may be significant cost to the patient. Furthermore, the PPO plan has a $1,500 deductible annually per person that must be met before the coverage for all services kicks in. The cost of the PPO premium is also higher, even though a deductible must be met before full coverage is provided.
In each of these plans, there are advantages and disadvantages that must be considered prior to making a decision regarding which plan is most feasible for the employee and his or her family. In the case of the HMO, there are many benefits associated with this plan if the ability exists to use in-network providers for all services sought (HMOvsPPO.org, 2011). In addition, this type of managed care offering enables medical records to be housed in a central location since all services are within the network, and the quality of care may be much higher because only select providers are used and permitted to be included in the network (Healthcompare.com, 2013). On the other hand, if an out of network physician is chosen, the level of benefits provided is minimal, thereby requiring significant out of pocket expense for the employee (Healthcompare.com, 2013). HMOs generally offer premiums at a lower cost in most cases (Selfgrowth.com, 2013). However, in cases where a specialist is required that is not within the network, there could be challenges in how the individual receives that type of specialized care (Financial Web, 2013).
At the same time, the PPO has its own in-network physicians and locations that are used, but the significant difference with this plan is that there is greater opportunities to select specific care providers without having to go through referrals each and every time (Healthcompare.com, 2013). In addition, PPOs operate throughout the country and therefore, the network and the choice of physicians is much larger (Healthcompare.com, 2013). However, the use of out of network services will also lead to a significant out of pocket expense for employees with this plan (Healthcompare.com, 2013).
The identification of differences between the HMO and PPO requires an effective understanding of the different managed care plans and their specific offerings. For many employees, the HMO is the preferred method because it is more cost effective and the premiums are more affordable. However, this type of plan is also restrictive due to the necessity to obtain referrals for all specialty services. For other employees, the PPO is preferred because it enables individuals and families to have greater freedom when choosing their care providers as long as they are within the network. In addition, no prior referrals are required for specialty services.
In each of these examples, it is important for individuals to identify the specific areas that are most important in supporting positive outcomes for employees and their specific health care needs. The quality of care that is provided with each managed care plan should be thoroughly examined in order to determine which plan is most feasible for the specific needs of an individual and his or her family. HMOs and PPOs each carry different advantages and disadvantages and also represent a means of exploring different elements of the managed care process and how it impacts patients. These efforts are important because they provide a greater understanding of managed care and how it promotes a greater quality of care in the lives of patients in need of these services.
Financial Web (2013). The advantages and disadvantages of HMO insurance. Retrieved from http://www.finweb.com/insurance/the-advantages-and-disadvantages-of-hmo-insurance.html#axzz2SC6HLUGh
Healthcompare.com (2013). HMO vs. PPO: Everything you need to know, simplified. Retrieved from https://www.healthcompare.com/articles/hmo-vs-ppo-everything-you-need-to-know-simplified/HMOvsPPO.org (2011). HMO vs. PPO Comparison. Retrieved from http://hmovsppo.org/
Selfgrowth.com (2013). Advantages and disadvantages of HMO and PPO health care plans. Retrieved from http://www.selfgrowth.com/articles/Advantages_and_Disadvantages_of_HMO_and_PPO_Health_Care_Plans.html