In many countries, the health care system is an engine of innovation that aims at ensuring that consumers get advanced life-enhancing treatments and generally quality services. This plays a crucial role in providing that an individual's health is maintained or improved in many ways. Despite these benefits, in most countries, health care financing is often inefficient due to the nature of the health care system regarding spending. To, therefore, improve the efficiency of healthcare financing and making it affordable for an individual having health insurance is essential. Besides, it ensures that the fiscal burden of associated medical costs does not shift to the family members. This paper gives a brief comparison of the various medical insurance plans such as the Health Management Organization (HMO) plan, Preferred Provider Organization (PPO) plan, and Exclusive Provider Organization (EPO) plan. Lastly, it will narrow down to one of the medical insurance plans that will be efficient and effective according to my needs.
Comparison between HMO, PPO and EPO Medical Plans
| Type of Insurance Plan | Plan features | Benefits | Disadvantages |
| HMO plan |
- Most Popular type of medical insurance An entire network of health care providers offer the services One must select a primary care provider within the system to coordinate all the health activities. Covers mostly preventive care and specialist services. Specialist services must be on approval of primary health care provider. Co-insurance applies for services outside non-preventive care. Have annual deductibles. Best suited for families and individuals who regularly use the services of physicians ( Gruber, 2017). |
Individuals can build long-term relations with the primary care physician. The co-insurance payment is often low with a minimum deductible. Very efficient for low –income earners and budget-conscious individuals |
Many restrictions regarding how many doctors the patient can see. Restrictions in the hospitals and other facilities. To see a specialist a referral must be made. Individuals with pre-existing conditions are sometimes not accepted into the plan. Physicians are required to enroll higher volume of patients to meet the quotas. |
| Preferred Provider Organization (PPO) |
Allows both-in-network and out-of-network providers. One can use both the primary care physician and the specialist without any restrictions. Co-payments for non-preventive medical care. Annual deductibles may apply Providers are paid on Discounted fee schedules. There is no risk sharing. |
More flexibility when it comes to choosing health care providers and specialists. Patients have the option of choosing provides outsider the PPO networks. Patients do not need referrals to see specialists. Less paperwork, no complicated rules. Patients get faster treatment. |
Co-payments are usually higher as compared to HMO plan. The patient must pay at least 20 percent of the cost. One is required to pay a certain amount before the coverage benefits plans. Patients have the responsibility of making decisions about how to manage their care. |
| Exclusive Provider Organization(EPO plans |
Individuals have access to all health care providers within the EPO network. Convenient to individuals who do not mind limitations. The plan does not accept emergencies. No out-of-network benefits Relatively cheaper as compared to HMO and PPO plans. |
In the plan, you do not have to get referrals to see a specialist. Faster delivery of services when needed. |
The insurance does not cover any outsider Provider outside the EPO network. |
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Medical insurance is a type of insurance coverage that covers the cost of medical and surgical expenses in an insured individual and the beneficiaries. Preferred Provider Organization (PPO) is an organization that runs networks of physicians, hospital and health facilities in contract with insurance companies to offer efficient and effective health care are my preferred insurance plan ( Bhargava, Loewenstein & Sydnor, 2015). The insurance company, therefore, decides to set up various policies that will ensure an individual chooses her preference depending on the types of services and cost. PPO provides more flexibility to the patients as they can choose any physician and care providers they want on the list given by the insurance provider.
Essential Features of the Insurance Plan
Coverage
According to Handel and Kolstad (2015), health insurance covers differs regarding coverage. Some cover one person, family, and other groupings. The reasons why I chose Preferred Provider Organization as my choice of insurance is because of its diverse coverage. Under this plan, family coverage is allowed which applies to the spouse and children until they turn 26 years of age. Besides, the children under the age of 26 years remain under the coverage even if they get married, attending school, not financially dependent or not living with the parent. This particular policy is very crucial in my family as it will help in securing finances as each family member will not have to take other insurance options. However, after my two children get employed, I will renew the terms of the contract to ease the financial burden and make them more dependent. The insurance plan gives individuals the option to replace the program during the open season enrolment especially if the consumer has a qualifying event. These events may include marriage, divorce, moving to new locations and childbirth.
Coverage also takes into consideration the variety of health care services that a consumer might use. Most of the services include preventive care wellness that involves routine examinations performed in a facility or at a physician office, counseling services, preventive screening and gynecological exams. Additionally, the consumer may also need serious illnesses that require treatment, laboratory tests, and drugs prescription. Given the full range of healthcare services, it is entirely possible to get a medical insurance plan that covers all of them. Having understood all this, I decided to take various options that were provided by my insurance company. This included the prescription drug coverage that would ensure that my diabetic daughter gets her drugs on time without delays. Besides, this benefit would help in reducing the costs incurred in buying drugs using cash. The chronic illness care management would also help in assisting my husband with the ongoing care and also keeping his health on track.
When choosing a plan, it is important to note that specifics of covered services may differ across plans. For instance, in the maternal coverage, only a few visits may be included or certain surgeries during the delivery process. It is therefore essential for the consumer to thoroughly go through the plans to avoid future inconveniences, especially when needing the services.
Costs
Consumers pay insurance coverage in the form of premiums for a given period. The incentives are paid regardless of whether the consumers seek the medical services covered or not during the time ( Young & Kroth, 2017). Individuals who contact the insurance provider directly pay for the premiums themselves without any assistance. However, if the employer is the one who has contracted the insurance provider, the incentives are deducted directly from the general payroll and the employer may also chip in some amount that is not accounted in the own salary. My premium payments would be from cost sharing. Employers will pay half of the amount through the monthly deductions. The other will be funded through my means to enjoy comprehensive services. This contribution strategy played an important role in helping me use this insurance plan as it will ensure that I am not financially strained in the process of paying. Besides, the insurance plan had the option of co-insurance, which refers to the amount an individual may pay after total billing especially in complicated situations. The insurance company would cater about 80 percent of the invoice while I would provide for the 20 percent. This would ensure that I do not reach the maximum spending limit hence denying me essential services if I need them.
Flexibility
Before an individual chooses any insurance plan, he or she must first consider whether the insurance provider is recognized and has a higher level of flexibility. The Health Maintenance Organization (HMOs) in most cases is assigned a primary provider upon joining the plan. The visits to the specialist must always be on referrals from the individual primary care provider. I preferred PPO as I had the option of choosing my primary care provider. Moreover, I would visit specialists without the referral from my primary care provider. The PPO insurance coverage also allows out-of-network coverage especially if one has far away from her chosen care facility. However, the limitation is that the cost may escalate higher that when one chooses within network facility.
Without a doubt, choosing the right health plan is a daunting experience. The jargon involved is quite overwhelming making the whole process complicated and trying to understand ( Young & Kroth, 2017). In most cases, people end up paying costly mistakes which could be avoided in the initial stages. One of the challenges I had was difficulties in finding the best insurance plan for my family. The various opinions I solicited from friends made me more confused instead of giving me the solution. I thought that a lot of information they were given me was meant to complicate the whole process and make it expensive. I, therefore, had to take time in reading what every insurance policy entailed to make the right decision.
Most of the insurance plans have higher deductibles especially if you require specialized care. The higher deductibles do not matter if the employer is paying for the policy or on your won since the payments come from your salary. In most cases, the insurance provider may end up deducting more than what is supposed to do. This is also another challenge that I encountered as I did not know how to review the insurer’s negotiated rate and to check the expenses that I have used towards the deductible. The insurance agent mandated to take me through all information regarding my insurance had to advise me to keep all the receipts for the payments and the credit from my insurer. The revenues would play an essential role in helping launch any complaints in case of oversight.
Most of the insurance companies keep changing their networks. This is to ensure that they pay lower rates to the practitioners. Most individuals are often shocked to find that the previous plan no longer exists in the chosen network. The challenge I faced was to determine the best insurance plan was to determine if my insurer has an extensive system that would not end up frustrating me. Before choosing a new doctor for any specialized treatment, I made sure that the providers were in my insurer’s network to avoid extra costs.
My choice of a plan would be different depending on the following circumstances. Health issues in my family would be a concern in selecting another health insurance plan. Firstly, my family health situation especially, that of my husband and daughter requires a series of network providers who can be consulted without any restrictions within the network and outside network. Besides, their drugs are quite expensive thereby needing additional financing. If the family health issues were not complicated, I would only choose a plan such as HMO which is cheaper regarding preventive services.
My insurance plan is tied to my job where my premiums are deducted and also chip on some amount to enjoy full benefits of my policy. Any change in my employment would mean that my health plan is altered or the services that I would access reduced. The compensation package may also change in at the end of the year. If my terms of employment changed, I would consider choosing another insurance plan that would not need paying extra cost to enable me to benefit the services.
In conclusion, the paper has delved into the various medical plans outlining their differences regarding critical characteristics, benefits, and disadvantages. Lastly, it has delved into the best insurance plan I would consider PPO as my family insurance plans because of its flexibility regarding coverage, benefits, and cost.
References
Bhargava, S., Loewenstein, G., & Sydnor, J. (2015). Do individuals make sensible health insurance decisions? Evidence from a menu with dominated options (No. w21160). National Bureau of Economic Research.
Gruber, J. (2017). Delivering Public Health Insurance Through Private Plan Choice in the United States. Journal of Economic Perspectives , 31 (4), 3-22.
Handel, B. R., & Kolstad, J. T. (2015). Health insurance for" humans": Information frictions, plan choice, and consumer welfare. American Economic Review , 105 (8), 2449-2500.
Young, K. M., & Kroth, P. J. (2017). Sultz & Young's Health Care USA . Jones & Bartlett Learning.
