Today, there are four different types of hmos:17
- network model. this is the normal or default type of hmo where subscribers are limited to a network of doctors.
- staff model. This type of hmo employs its own doctors, and those doctors only see subscribers under the shared hmo. cane models are not as common as before.
- group model. A group model is almost a hybrid between the network and staff models. While physicians in a group model are not directly employed by the HMO, they are hired exclusively and paid in bulk by the HMO. The doctors then distribute the hmo’s lump-sum payment among themselves. Like the staff model, doctors in a group model treat only their hmo subscribers.
- open panel model. This type of hmo works similarly to the group model, except that doctors in an open panel model will also treat patients who are not covered by the hmo. A unique feature of the open panel model is that the primary care physician (PCP) can refer patients to doctors outside of the HMO network and those patients may still receive partial coverage.
The history of PPOS also goes back to the Health Maintenance Organization Act. Once HMOS were born, insurance companies saw an opportunity to give patients more flexibility while better controlling medical costs. therefore, ppos were introduced. PPOs have gained popularity among large corporations with many offices spread across the country, as a comprehensive PPO plan allows for greater geographic flexibility among the many employees.
Reading: What is ppo and hmo health insurance
additional options: epo, pos, ffs, hdhp
hmos and ppos aren’t the only health insurance options. there are some additional insurance plans that work in a similar way.
an epo, or exclusive provider organization, operates like an hmo but does not require all care to go through a primary care physician, and no referrals are needed to see an specialist. Like an HMO, coverage is limited to only doctors within a network. however, epos also tend to command higher premiums than hmos.7
Another type of health insurance plan is a pos, or point of service plan. A pos shares some of the qualities of an hmo and a ppo. Like an HMO, a POS requires the use of a primary care physician. And like a PPO, a POS allows for out-of-network coverage, but usually with a referral from your primary care physician.18
A fee-for-service (ffs) plan, sometimes called an indemnity plan, allows the most freedom and flexibility, but also comes with the highest price. ffs patients can choose doctors and specialists as they please, but face high out-of-pocket costs and are not always covered for preventive services. this type of plan may require you to pay for all services and then submit a claim to your insurance company for reimbursement.19
As the name suggests, a high deductible health plan (hdhp) comes with a high deductible. the trade-off is a lower monthly premium. Employer-based plans often combine an HDHP with an HSA, or health savings account. An HSA collects untaxed contributions from your paycheck and uses that fund to pay for out-of-pocket health costs, such as copays or coinsurance.19