Healthcare Insurance

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Managed Care Plans

Managed care is a way to control cost. It refers to the way in which health insurance plans monitor how much health care you use. For example, if you need to see a specialist, a plan may require a referral from your primary care doctor to assure that the consultation with the specialist is necessary.  All managed care plans require you to pay a monthly premium. You or your employer may pay the entire premium, or you may share the cost with your employer. 

Health Maintenance Organization (HMO)

A health maintenance organization (HMO) is an insurance plan that provides health care by hospitals, doctors, and other medical professionals within a network. Plan members must use the providers within this network for the HMO to cover their medical expenses. In emergencies or when deemed medically necessary, HMOs may make exceptions and permit members to use providers outside of the network.  

In almost all HMOs, you must have a primary care physician (PCP). Sometimes the plan assigns a PCP to you; sometimes you get to choose one. The responsibility of the primary care physician is to keep an eye on your health, provide most of your medical care, and refer you to specialists and other health care professionals when necessary. If you see a specialist without a referral from your primary care physician, you may have to pay the specialist's bill yourself. 

Many HMOs offer a point-of-service (POS) plan, which entitles members to refer themselves outside the plan and still get some coverage (an advantage to members who may need out-of-network specialists for certain medical conditions).  Not all HMOs offer the same services. Some plans may limit services such as outpatient mental health care. However, HMOs usually provide preventive care as a cost-saving measure. Because HMOs receive a fixed fee for your covered medical care, preventing serious, costly illness is in their interest.  Each time you use the services of the HMO, you pay either nothing or a small co-payment, perhaps $15 or $20. You don't have to pay a deductible. Your total medical costs with an HMO are probably lower than with fee-for-service insurance.  

Also, your paperwork is minimal in an HMO. By displaying your membership card at the time of service, you don't have to fill out claim forms for office visits or hospital stays.  During your research, talk with people who belong to the plan, and ask them about the plan's pros and cons. Additionally, ask the plan representative questions such as: 

How large is the pool of primary care physicians I have to choose from?

How difficult is changing primary care physicians and specialists?

How often can I change primary care physicians?

How far in advance do I have to make appointments with the doctor?

Is this wait the same regardless of which doctor I use?

What are the limitations on services?

How do emergency services work?

What do I do if I need treatment while I'm out of town or out of the country?

 Preferred Provider Organization (PPO)

Preferred provider organizations (PPOs) combine features of traditional fee-for-service plans and HMOs. PPOs have contracts with doctors, hospitals, and other providers to accept lower fees from the insurer for their services. As with HMOs, members must use the network (preferred) providers for medical expenses to be fully covered. With emergency care in some PPO plans, both the hospital and the attending physician must be in the network in order for the entire service to be considered in-network.  

In a PPO, members can use (without a doctor's referral) doctors outside of the plan and still receive some coverage. This flexibility lets you keep your current doctor, even one who isn't part of the PPO's network. In a PPO you pay more of the expenses than in an HMO and may have to fill out claim forms. 

As with HMOs, some PPOs may expect you to choose a primary care physician to monitor your health care. If you select a primary care physician who is not in the network, the cost is higher, which means that you have to meet a deductible and pay coinsurance based on those higher charges. You may also have to pay the difference between what the provider charges and what the plan pays. 

PPOs usually cover preventive care. Your co-payment is small when you see an in-network doctor, and you don't have to fill out any claim forms.  Carefully study the pros and cons of PPOs, since they incorporate some features of both fee-for-service plans and HMOs. 

Continuing Coverage

What can you do to keep yourself covered, without a break in coverage, when you lose coverage under an employer's group insurance plan?  Here are some definitions of the terms you will encounter. 

Beneficiary: Someone who is eligible to receive benefits under an insurance plan.

Medicare beneficiary: The person, usually the patient, who is enrolled in the Medicare program and receives the medical or other related services.

Qualified beneficiaries: The spouse and/or dependent children covered under a group plan. If the plan is terminated, the employee is also considered a qualified beneficiary.

Qualifying event: An event that normally would result in the loss of coverage under a group plan, such as when an employee dies, is laid off, is subject to reduced working hours, retires, or quits. A qualifying event may occur when a covered spouse divorces or separates from an employee, or when a child loses dependent status by turning a specified age (often 19 or higher; sometimes as high as 25 if a full-time student). A qualifying event triggers continuation or conversion rights.

Continuation: Allows beneficiaries to continue coverage under the same group plan for a specified period.

Conversion: Gives beneficiaries the opportunity to convert to individual or family coverage at individual or family rates. 

Conversion Options

By law, group plan administrators must give beneficiaries of a plan written notice of their rights to continue and convert coverage. They must do so when the employee's plan becomes effective, as well as when the plan changes to incorporate a new conversion option. Administrators must also give notice to beneficiaries within a specified number of days of a qualifying event (however the beneficiary must notify the administrator that the qualifying event occurred). This notice should explain the deadline by which beneficiaries must tell the employer whether they plan to continue or convert coverage. If you miss the deadline for notifying the employer of your intent to continue or convert coverage, you may lose your opportunity to do so.  

Most plans require that an employee be enrolled in the group plan for at least three months before beneficiaries can exercise their continuation and/or conversion options. A covered spouse who divorces or separates from the employee and covered children no longer eligible for coverage under the employed parent's plan are the people most likely eligible for the conversion option. They don't need to submit proof of insurability, and pre-existing conditions, other than exclusions that already exist under the group plan, don't affect conversion, either. Laws and provisions may vary by state or contract. Always check your state's laws and your insurance policy, contract, and/or plan document for eligibility and other requirements governing continuation and conversion of coverage. 

Blackburn Group, Inc.
Penfield, NY 14526-0052
(585) 586-4530,  (585) 586-7479 fax,  Email: sales@blackburngroup.com
  

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Copyright 2006 Blackburn Group, Inc. All rights reserved.