Private Insurance

HMO

100

What does HMO stand for?

Health Maintenance Organization

• Explanation: An HMO is a type of health insurance plan that provides coverage through a network of contracted providers, emphasizing coordinated and preventive care.

200

When was the HMO model established?

• 1973 (modern form)
• Explanation: While earlier forms existed, the Health Maintenance Organization Act of 1973 defined HMOs and set federal standards for their operation, leading to their modern widespread use.

300

Who is eligible for an HMO plan?

Those in the service area

• Explanation: Eligibility usually requires residing or working within the HMO’s designated service area.

400

How do current HMO plan designs typically structure provider access?

• Primarily in-network
• Explanation: HMOs maintain a provider network, a set of health care providers and facilities that the insurer has contracted with to furnish covered benefits to enrollees. Generally, coverage and cost sharing for benefits may be contingent on the benefits being provided by an in-network provider (as opposed to an out-of-network provider).

500

How do HMOs impact healthcare costs for consumers?

Premiums

Explanation: HMOs primarily operate using premiums collected from enrollees and, in some cases, employers. This premium revenue is then used to cover medical claims, pay for administrative expenses, and, ideally, generate a profit if revenue exceeds costs.

PPO

100

What does PPO stand for?

• Preferred Provider Organization
• An insurance plan that has established contracts with providers to offer members discounted rates.

200

When was PPO established?

• 1980
• An early organization was started in Denver at St. Luke’s Medical Center and quickly spread across the United States.

300

Who is eligible for PPO?

• Anyone who has health insurance policy that offers a PPO plan.

400

What is the current state of PPO?

• Very common amongst Americans.
• About 48% of plans offered by providers have a PPO plan.

500

How does PPO impact the US health care system?

• It influences both cost and access to care.
• It allows individuals a variety of providers to see at a cost-effective rate.

POS

100

What does POS stand for?

• POS stands for point of service: In health insurance POS is a type of managed care plan that combines elements of both HMO and PPOs. It offers the flexibility to see both in-network and out-of-network providers, but typically at a higher cost for out-of-network care. So, each time you need healthcare, you can choose to use your network providers or seek care from a provider outside of network. Enrollees decide which doctor they want to see. POS plans offer more flexibility.

200

Who is eligible for benefits/services?

• POS is a good choice for individuals who want a balance of flexibility and cost control. Technically anyone can have POS insurance because it’s a type of health insurance that combines features of both HMOs and PPOs. You can find POS plans through your employer or the affordable care act.

300

When did POS emerge?

• POS insurance plans emerged as a managed care option in the 1990s. It offered a balance between the cost-saving features of HMOs and the provider choice flexibility of PPOs. Despite initial popularity, POS plans eventually declined in usage as some members found the complexities of out-of-network claims and higher costs burdensome.

400

What is the current state of POS?

• While POS plans offer a good balance of flexibility and cost-effectiveness, they are not as common as HMOs or PPOs
• As of 2023, only 4% of plans were POS

500

How does POS impact the US healthcare system?

• POS impacts the US healthcare system by increasing patients’ flexibility in choosing healthcare providers. POS promotes a balance between patient choice, care coordination, and patient choice.

CDHP

100

What does CDHP stand for?

Consumer-Driven Health Plan

200

True or False: CDHPs have been around for over 50 years.

False: CDHPs are a recent innovation and originated in the late 1990s, but widespread adoption started in the early 2000s

300

What are the two elements of a CDHP?

A high-deductible plan and a pretax payment account (Health Savings Account). Eligibility is determined by coverage by a HDHP and having an HSA.

400

Why were CDHPs created?

CDHPs were created to help combat rising health care costs, as well as to provide enrollees with increased transparency and control over their health care expenses

500

How do CDHPs impact consumers in health care?

Consumers know the cost of services and are able to make decisions about their coverage, but they carry some financial risk with a higher deductible and decision on how much is put in the savings account to go towards medical expenses.

HDHP

100

What is an HDHP?

• High dollar health plan
• An HDHP is a health insurance plan with a deductible of at least $1,650 if you have an individual plan or a deductible of at least $3,300 if you have a family plan. The deductible is the amount you'll pay out of pocket for medical expenses before your insurance pays anything. In addition, the plan's out-of-pocket limit must be no higher than $8,300 for an individual plan or $16,600 for a family plan. The out-of-pocket limit is the most you'll have to pay in a year for medical expenses covered by your insurance plan.
• So, a lower premium, but a higher deductible than other plans.

200

When did HDHPs begin?

• Early 2000’s
• In 2001, Humana became the first major insurer to offer an HDHP. By 2004, about 10% of employer-sponsored health plans had high deductibles. The percentage of HDHPs has steadily increased since then, reaching over 50% in 2018

300

Who is eligible for services?

• Employees whose insurance follows either the Manager's Plan or the Commissioner's Plan are eligible to enroll in the HDHP.
• HDHPs are often offered through employers but may also be purchased outside of an employer.

400

What is the current state of payor source?

• Most often individuals who are wealthy and healthy.
• An HDHP is best for younger, healthier individuals who don’t expect to need healthcare coverage except in the face of a serious health emergency. Wealthy individuals and families who can afford to pay the high deductible out of pocket and want the benefits of an HSA may benefit from HDHPs.

500

What has been the impact of HDHP on US healthcare system?

• Lower premiums but delayed or avoided care
• HDHPs have had substantial impact on the US healthcare system in both positive and negative ways. It has lowered premiums for employees and employers, increased consumer price awareness, and has allowed for growth in HSAs. The main negative impact of HDHPs is that people often delay or avoid seeking care as they do not want to pay their deductible, this has worsened health disparities and placed financial strain on many people facing medical debt.