Getting to know your Health Plan Acronyms

With all the recent talk about Health Care Reform, you may be hearing a lot of acronyms being thrown around when people talk about health insurance.  Some of the more common acronyms include HMO, PPO, and POS.  But what do they all mean? HMO (Health Maintenance Organization) – An HMO is a health organization that provides health services to individuals known as subscribers or members.  HMO’s generally contract with a group of doctors and medical providers to provide services at an agreed-upon, or negotiated, cost.   This group of doctors and providers is known as the HMO’s network.   With an HMO plan you select a Primary Care Physician (PCP) who coordinates your care and refers you to specialists when needed. There is generally a strong emphasis on preventive care under an HMO.   If your health insurance is provided through an HMO, you must receive services from providers who are in the network, in order for the plan to pay benefits.   If you go outside the network, you will be responsible for paying the cost of services received. PPO (Preferred Provider Organization) – A PPO is a select group of hospitals and medical practitioners in a given area who have contracted with an insurer to provide services at a pre-arranged cost.   Similar to an HMO, this group of doctors and providers is known as the PPO’s network.  Unlike an HMO, however, if you are covered under a PPO you don’t have to designate one doctor as your PCP.   In addition, with a PPO you can go out of your network for services.   If you do go out-of-network, though, you will be required to pay more in out-of-pocket costs for those services. Under a PPO plan, you usually have to meet a deductible each calendar year.   This means that, for services that are subject to the deductible, the plan will not pay until you have satisfied the calendar year deductible for that year.   In order to satisfy your deductible, you will have to pay out of your pocket for the services. POS (Point of Service) –A POS plan is a managed care plan that allows the member to receive care from either in-network or out-of-network providers.   A POS plan is similar to an HMO in that you will be required to choose a Primary Care Physician, who will coordinate your care and refer you to specialists within the network.  A POS is also similar to a PPO, though, in the fact that you may choose to receive services either within the plan’s network or outside the network.   If you receive services from an out-of-network provider, you will be required to pay more in out-of-pocket costs.  In addition, some services may not be covered out-of-network. There are many other acronyms that you may wish to learn about, including FSA (Flexible Spending Account), HDHP (High Deductible Health Plan), HSA (Health Savings Account) and HRA (Health Reimbursement Arrangement).  We’ll cover these and other topics in future postings on this blog.   We’ll also spend some time explaining the difference between deductibles, copays, and coinsurance – and why you need to know what all these terms mean. If you have a particular question, please feel free to post it below, or for more information on Health & Life plans visit our Employee Benefits division website, Employee Benefits Solutions.