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HMO...PPO...EPO??? What does it all mean.
Well... rather than give you the long version of
each term, let's get to the heart of what each is,
and more importantly, how it affects you.
First
a stroll down medical memory lane. Up until
the mid 80's (wow...last century), medical
insurance was pretty straight forward. You
can go to any doctor and the insurance company is
going to pay a certain amount. It was around
this time however, that they came up with
"managed care". And voila, terms
like HMO, PPO, and EPO made their entrance.
Well what are they?
They
are essentially volume discounts.
In
order to control costs, the insurance company went
to doctors and said, "Look. If you join
our PPO, we'll bring you a lot of customers (us
the insured) but we want you to discount your
costs 30-60%. That $100 doctor visit should
be $60. And if you join our HMO, we'll pay
you $50/month for each person who signs up with
you. In turn, there will be a lot of people
to make up for this discounted amount.
Now
there are variations in a contract between
insurance companies and doctors, but essentially,
they are offering volume discounts to help contain
medical cost inflation...and it worked!!
From the early 90's to about 1997...all was
relatively calm on the insurance premium front.
We may have reached the extent of what managed
care can do as premiums have risen significantly
since 1998.
Now that we have a behind-the-scenes view of what
HMO, PPO, and EPO are from a doctor point of
view...how do they affect us??
First
let's break each one down.
If
the old way (Fee for Service) was that you can go
to any doctor you wish, then the HMO
(Health Maintenance Organization) is the polar
opposite. You choose one doctor up
front, and essentially all care is managed through
that doctor and with a local hospital and medical
group. This doctor is referred to as a
Primary Care Physician and he or she makes most
decisions on care and/or referral to specialists.
The trade-off with this highly structured system
is that the benefits are very rich...i.e. low
out-of-pocket expense when you get sick or hurt.
Some people swear by it...others swear at it.
It works for people who are flexible and want
low-out-of-pocket expense. You typically do
not find HMO's available in rural areas...because
remember, they need lots of people to make it
work.
Back to our spectrum, the PPO's (Preferred
Provider Organization) are somewhere in between
the "go to any doctor" method of
the past and HMO's "choose one
doctor/hospital". There is an extensive list of
doctors and hospitals in Texas from which you can go to. You refer yourself
out to specialists and you are not locked
into one area or one doctor. You receive the
negotiated rates (30-60% discounts mentioned
above) with a PPO plan which can amount to
significant savings. That being said, you
will help pay along the way...either in the form
of a percentage or a deductible (we'll get into
these in section 4). Now with PPO's, you can
go to doctors who are not in the network but then
your benefits are significantly reduced.
Why?? These doctors are not offering the
"volume discount" we mentioned above.
Another
variation not as often seen is an EPO
(Exclusive Provider Organization). An EPO
has the exact same doctors/hospitals as the PPO
list but with no out-of-network benefits. If
you go to a doctor not listed on the EPO list, you
have no benefits.
Some
more interesting facts:
In
a true emergency (and be very conservative on this
definition...it better be serious!!), your
benefits will likely cover you even out of the
above networks.
Sometimes doctors participate in HMO and PPO...sometimes
just one of them. You can verify your
doctor's participation
here
under "provider".
This
HMO or PPO question is really the big one to
answer first if possible. You can always ask
us to explain further the differences between the
two.
Next...Premium
premium premium. Just like real estate, it's
critical when choosing a plan. But don't
assume that a more expensive plan is necessarily
better for you. Let's take a closer look...
Next
Page - Sect 2 - Premium premium premium
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