What is a managed care plan?

Under managed-care plans, you or your employer pay a fixed premium and you typically receive a comprehensive care package, ranging from routine office visits and preventive care to hospitalization. The three main types of managed care plans are preferred provider organization (PPO), health maintenance organization (HMO), and point of service (POS).

Basics of Managed-Care Plans

• Your cost is generally lowest if you seek care from the network of participating providers and hospitals.
• You generally have lower deductibles to satisfy and limited paperwork to process.
• You also may not be expected to pay large out-of-pocket amounts for services.

Types of Health Care Plan

PPO: The insurance company has a contract with hospitals or doctors to provide care at a discounted rate. You may have more flexibility in your choice of in-network providers or specialists without the need for a referral from a primary care provider. However, if you choose to see an out-of-network provider, you may pay more.

HMO: The insurance company has a contract with a network of providers that will provide your care. Generally, you’ll need to see a primary care provider first for a referral before seeing specialists, and your choice in doctors may be limited. The HMO may not pay for care from out-of-network providers or if you see a doctor without a referral.

POS: You’ll see a primary care provider first, just like an HMO, but you may have more flexibility about seeing providers out of network. However, if you see an out-of-network provider, you may pay more in the form of a separate deductible, copayment, or portion of the total bill.