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Interesting Facts You May Not Have Known About Family Health Insurance (Part II)
In Part I of this article, we started out by discussing the differences between the terms family health insurance and individual health insurance, followed by the different types of family health insurance available in today’s market. We now continue that topic…
Managed care plans are basically networks that provide contracted services by specific providers at pre-negotiated rates. The HMO was the first managed care insurance available, followed by the PPO and POS plans.
HMO’s are prepaid plans in which members pay a fixed monthly fee, regardless of how much medical care is needed in a given month. HMO’s provide medical services ranging from office visits to hospitalization and surgery, and usually require that you stay within the network when you need services from physicians and hospitals.
The primary drawback of an HMO is that enrollees are required to choose a Primary Care Provider (PCP) from the HMO’s approved list of providers and sometimes, your 'preferred' doctor is not on the list. The see a specialists within the network, you are required to first obtain a referral from your PCP. The HMO typically won't cover the costs of medical care provided by professionals outside the HMO network. Furthermore, because an HMO network is limited in size, it may take a long time to get an appointment with the PCP.
A second option for managed family health insurance is a PPO. A PPO is similar to an HMO, with a significant difference: There is no need to first be seen by a PCP. Participants are advised to select a medical professional from the PPO's approved 'network' but they don't have to and they don't need a referral to see a specialist. Should a participant choose to go outside the network, their co-payment will be higher, the percentage that the PPO pays for the medical care will be lower, and they will likely have to satisfy a higher deductible. PPO plans have become the most popular family health insurance plan in the U.S. today.
Although PPOs offer greater freedom of choice, there are more costs involved in this type of managed care plan. These costs can be significant when enrollees go outside the network.
A POS managed care plan can be described as a cross between an HMO and PPO. It offers more freedom of choice like a PPO, and a lower cost like an HMO. Participants must designate a PCP, but even then it is difficult to get a referral to a specialist. When participants stay within the network, paperwork is minimal, and so are co-pays. Plus, there are no deductibles. Although they might sound like the best of both worlds, POS family health insurance plans aren't very popular.
Choosing family health insurance that is "right' for you and your family can take a lot of effort. Educating yourself is a good first step. As you go through the process, it's important to follow through by asking lots of questions and carefully evaluating the various options before you, so that you can make the wisest health insurance choice for you and your family.
About the Author: Jonathon James has been working in the health industry for nearly twenty years. To view additional articles and resources related to family health insurance, please visit