Type of Plan
HMOs, PPOs, and Indemnity Plans
Pacific Coasts and in most large metropolitan areas are familiar with Health Maintenance Organizations. HMOs offer a restricted panel of physicians and hospitals, and put the focus on preventive medicine, easy access to routine care, and on closely managing healthcare expenditures. HMOs are less common in other parts of the U.S. Most HMOs require patients to have their care directed by a gatekeeper, a primary care physician who controls the patient's access to specialists, expensive diagnostic procedures, and other high-priced services. HMOs offer no reimbursement for treatment outside their network—something that many people find burdensome. Depending on their efficiency and panel of doctors, the premiums charged by HMOs are generally lower than what PPOs charge, and nearly always well below the rate charged by open-ended Indemnity Plans.
Indemnity Plans are at the other end of the spectrum from HMOs. They cover visits to any doctor, any specialist, and any other medically necessary service, usually with few managed care controls. There are still some indemnity plans around, but in nearly all markets, they have been priced out of business.
Preferred Provider Organizations, or PPOs, represent the middle ground between HMOs and indemnity plans and are very popular with both employers and employees. PPOs work to preserve the best features of HMOs, such as affordable routine care, preventive services, and low-cost office visits, while eliminating gatekeepers and opening up access to all of the providers in the community. PPOs rely on members using "in-network" doctors and hospitals for most of their care. In-network providers have agreed to reduce their charges in exchange for higher patient volume. The in-network providers are the "preferred" ones, and the PPO pays a higher percentage of their claims, generally 90 or 100 percent. When members want to see an "out-of-network" provider, they are free to do so, and they will pay a larger share of the bill.
The Unitarian Universaslist Association has chosen to offer three PPOs: a standard plan that offers benefits that closely mirror HMO plans for in-network care; and two with a high deductible, for those who want a lower premium and are willing and able to budget for unforeseen expenses.
For more information contact healthinsurance @ uua.org.
Last updated on Friday, April 18, 2008.
