For many years, people felt that they were caught between a traditional indemnity health insurance plan (a wide range of options and a high degree of security in case of high-cost accidents or serious illness) and a care plan. managed (an approach to preventive medicine at relatively low cost but with severely limited options).
Today, however, it is possible to some extent to enjoy the benefits of both traditional indemnity insurance and managed care through a variation of the original Health Maintenance Organization (HMO) model known as an Organization. preferred provider (PPO).
A PPO is essentially an HMO, meaning the insurance company will establish a network of health care providers and, in exchange for relatively low cost, encourage or, in some cases, require policyholders to seek treatment within the network. of the HMO. When treatment occurs outside of the HMO’s network, much, if not all, of the cost of such treatment is normally borne by the policyholder. However, in the case of a PPO, the rules for policyholders who wish to seek care outside the HMO’s network are relaxed.
Within an HMO, the policyholder is assigned a particular physician or primary care physician (often referred to as a “gatekeeper”) and the policyholder must go through the primary care physician for treatment. If, for example, the policyholder wishes to see a specialist, then they will need to be referred by the primary care physician and may or may not have a say in which particular specialist they will be referred to.
However, in a PPO a primary care physician is not assigned and therefore a referral is not required. Therefore, members are free to seek treatment through a specialist who is not a member of the HMO’s network, if they wish.
Of course, this choice has cost implications, and policyholders will almost certainly have to pay more for treatment with a physician or facility outside the HMO’s network than they would if they sought treatment within the network. However, unlike the HMO model, the PPO gives the policyholder the choice.
If desired, a PPO provides policyholders with the low-cost managed health benefits of an HMO with the option to choose a greater variety, though higher cost, of indemnity insurance when it suits their needs.
It probably won’t come as a surprise to find that traditional indemnity policies are fast disappearing today and twice as many people are now enrolled in PPOs than HMOs.