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Important Features of Health Insurance
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HMO:
Health Maintenance Organizations
(HMOs) were a great idea when first conceived over 20 years
ago. The basic principal was to promote good health by encouraging
its participants to visit their doctor by charging only a nominal
fee. This way people would have more regular checkups and the medical
community could catch any problems in their infancy before they escalated
into more serious conditions. The HMO system seemed to work well for
a while, but now has become an administrative nightmare.
HMOs tend to charge a higher premium than PPOs. There are co-pays
for doctor visits, hospital and emergency room, prescriptions, and
diagnostic tests; but they usually do not have deductibles or coinsurance
payments. Under this system, you must be assigned to a primary care
physician who must be part of the HMO. Often time their list of doctors
is quite limited, forcing you to leave a doctor with whom you have
had a relationship for years. You must visit this doctor in order
to get a referral to any specialist (who must also be in network).
Even if you know that you need a specialist, you must still waste
your time in the primary care physician’s office and pay the
co-pay just to and get the referral. To see the specialist you must
pay another co-pay, usually more than that of your primary care physician.
The single most alarming characteristic of the HMO is how they pay
doctors. The primary care physician is salaried, or is given a monthly
allowance for each patient assigned to him. This means that whether
you visit him 10 times a month, or not at all, he makes the same amount
of money. Do you see incentive to schedule follow-up visits? In addition,
the primary care physician may get a bonus based upon the profitability
of the HMO. For each referral given, a part of his bonus goes to the
specialist. This is not to say that there are not altruistic physicians
who have the patient’s best interests in mind, but what is the
chance that a doctor may put his finances ahead of your care?
The same HMO system is an option for those participating in Medicare.
The difference being that you assign your Medicare premiums to the
HMO, so there was no additional cost to you. One large HMO in Arizona
has made substantial changes to their program fore 2004. They will
be charging Medicare recipients a premium, reducing plan options,
increasing co-pays, and in some instance replacing the fixed dollar
co-pays with a co-insurance percentage which implies unlimited potential
risk to you. (See Medicare Supplements)
As long as you remain healthy, or need only
routine care, an HMO may work well. However, Golden Gates Agency refuses
to sell plans that we do not find credible, so we do not offer HMOs
to our clients.
PPO:
The Preferred Provider Organization (PPO) is mode
of health care delivery through which an insurance company manages
costs by negotiating price discounts with health care providers in
exchange for their business. The network of physicians and hospitals
provide the plan participants with discounted rates for their services.
Individuals covered by a PPO are also allowed to use providers outside
the network, including specialists, for an additional expense. You
select the amount of money that you are willing to have at risk through
deductibles, coinsurance (and sometimes co-pays), then the balance
of your medical expenses are paid by the insurance company up to the
lifetime maximum. Your premiums generally decrease as your potential
total liability increases.
At
Golden Gates Agency, we have selected PPO plans using the Arizona Foundation for
Medical Care (other networks
are also available for those who spend time out of state). This network
includes all hospitals in Maricopa County (even Mayo Clinic) as well
as 98% of doctors. You choose your own doctors, no referral necessary.
Coverage is both in and out of network. If you are traveling out of
state, or out of the country, any emergency treatment is covered as
if in network. You will not lose coverage if you move out of state.
We chose Advance PCS as our prescription
service, offering a nationwide pharmacy network, and preferred pricing.
Our Major Medical Plans have $5,000,000 lifetime maximum per person,
with no limit on individual instances. |
