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How Health Plans Work
Health plans work differently depending on their design.
Today, most health plans are some form of managed care plan: Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs) the most common.
While both HMOs and PPOs rely on a network of physicians, they are structured differently and use completely separate systems for payment and claims. New "hybrid" plans make things more interesting.
HMO Plans
HMOs are managed care plans that require you to use network services.
While most HMOs do not have plan deductibles, some do, and many have prescription drug deductibles. You choose a medical group and primary physician to coordinate your care. Read more about how HMO plans work.
Kaiser HMO Plans
Kaiser plans are unique as they are a "self-contained" organization. Physicians and staff work directly for Kaiser and facilities are Kaiser owned.
This means you communicate with one organization only, not a separate medical group and insurer. Because you access services through Kaiser, you don't have to worry about using a non-network provider. Read about Kaiser plans.
PPO Plans
PPOs allow you to go to network or non-network providers. Cost are significantly higher for out-of-network.
PPOs give you the widest choice of doctors and facilities. Read about how PPOs work.
Hybrid HMO/PPO Plans
HealthNet offers a "hybrid" group plan that allows members to choose at the time of service whether to access care through their HMO or PPO network.
Called Elect Open Access, this popular plan offers HMO convenience and PPO choice. Visit Health Net's employer site.
HSAs and High Deductible Plans
HSAs, or Health Savings Accounts are special tax-advantaged accounts that can be funded pay medical expenses when used with a special qualified High Deductible Health Plan.
There are special considerations for both the health plan and the account. Read more about High Deductible Health Plans or Health Savings Accounts.
"Value" Plans
Some companies try to market discount health plans that are not actually insurance to groups and individuals. These plans advertise discounts at a network of physicians or at pharmacies for a monthly fee. Be wary of offers that sound too good to be true - they probably are!
Read more about the dangers of discount plans.There are also plans referred to as "mini-med" plans. These offer some basic services for little or no copay, such as preventive care office visits, but do not insure for major services such as hospitalization, surgeries, etc.
"Mini-meds" give the illusion of insurance without true protection against catastrophic expenses. A much better solution is a high-deductible plan that at least covers preventive care.