The Facts about PPO, HMO, FFS, and POS Plans

Almost every health plan sold today is a managed care plan. A managed care plan contracts with a network of doctors, hospitals and other providers who agree to discounted rates, then uses lower costs to steer you toward that network. HMOs, PPOs, EPOs and POS plans are all types of managed care. The older model, fee-for-service (FFS), is now rare outside of Original Medicare.

Fee-for-service (indemnity) plans

In a traditional fee-for-service plan, there is no network. You can see any licensed provider, and the plan pays a share of each covered bill after your deductible. You often pay the provider first and submit the claim for reimbursement.

Fee-for-service major medical coverage has largely disappeared from the individual and small-group markets. The best-known fee-for-service program today is Original Medicare (Parts A and B), which lets you see any provider in the country who accepts Medicare.

Do not confuse fee-for-service with fixed indemnity insurance. A fixed indemnity plan pays a set dollar amount, for example per day in the hospital or per doctor visit, no matter what the care actually costs. These plans are supplemental. They are not major medical coverage, are not ACA-compliant, and can leave you with large bills. They should not replace a health plan.

The four managed care plan types

HMO (Health Maintenance Organization): covers care only from in-network providers, except emergencies. A primary care physician coordinates your care and refers you to specialists. Usually the lowest premiums.

EPO (Exclusive Provider Organization): also in-network only, except emergencies, but you can usually see in-network specialists without a referral.

POS (Point of Service): works like an HMO in network, and also pays part of the cost for out-of-network care after a separate, higher out-of-network deductible.

PPO (Preferred Provider Organization): lets you see any provider without a referral. You pay less in network. Out of network, the plan pays a smaller share and the provider can bill you for the difference between its charge and what the plan allows. PPOs usually have the highest premiums.

For help choosing between them, see HMO, PPO, EPO or POS: Which Plan Type Is Right for You? and What's the Difference Between an HMO and a PPO?

What every ACA plan must include

Whatever the network type, individual and small-group plans that comply with the Affordable Care Act share some baseline rules:

• Preventive care: recommended preventive services, such as annual checkups, screenings and immunizations, are covered in network with no cost sharing.
• Essential health benefits: plans cover core categories such as doctor visits, hospital care, maternity care, mental health care and prescription drugs.
• An out-of-pocket maximum: your in-network costs for covered care are capped each year. Out-of-network costs may not count toward that cap, or may have a separate one.
• Emergency care: emergency services are covered at in-network cost sharing, even at an out-of-network emergency room.

The federal No Surprises Act also protects you from most surprise out-of-network bills for emergency care and for certain care at an in-network hospital or surgery center.

The bottom line

The plan type tells you how much freedom you have to choose providers. The deductible, copays, coinsurance and out-of-pocket maximum tell you what that care will cost. Compare both, and check that your doctors, hospital and prescriptions are covered before you enroll. We are happy to do that check for you.

Plan rules vary by carrier and plan, and the Summary of Benefits and Coverage and policy for each plan govern. Questions? Call 855.847.7020 or email help@ihealthagents.com. Our help is free.