The need for an insurance plan is necessitated with the need to have timely and proper medical care in the event of an illness or an accident. In this respect, there are three basic types of health insurance medical plans that are utilitarian in serving different purposes. These health insurance medical plans can be differentiated from one another with regards to their salient features. This paper canvases the differences between Preferred Provider Organization (PPO), Health Maintenance Organization (HMO) and Point of Service (POS) plans. The paper also seeks to institute some of the pros and cons of the above medical insurance plans.
Preferred Provider Organization (PPO) is an insurance health care plan in which a group doctors offer serves to a specific group of associations or individuals with very limited deductibles or copayments. The plan can be sponsored by an individual, an insurance company or any other interested organization (Chisolm, 2007). Unlike PPO, Health Maintenance Organization (HMO) is a managed insurance plan in which the insurance company controls all aspects of the insured’s health care (Chisolm, 2007). The plan, on top of providing financing for medical care, also delivers treatment. As Chisolm (2007) asseverates, PPO and HMO are similar in the sense that the two plans are all devised towards the reduction of the cost of health care by centering on “preventive care and implementation of utilization management controls”. Point of Service (POS), on the other hand, is a plan that combines most of the salient features of PPO and HMO. In this plan, the insured people chose a preferred health care provider within the network that will be responsible for all the referrals (Chisolm, 2007). The plan does not have any deductible but has a minimum co-payment applicable when one seeks the services of the preferred health care provider within the network (Chisolm, 2007).
The main advantages of PPO and HMO are that they are characterized by very limited deductibles and copayments and no lack of maximum payouts respectively (Harrelson, Greg, & Winterstein, 2009). Additionally, PPO is advantageous because members are not limited to seeking health care services within the network. The other underlying pro of HMO is that there is no out-of-pocket cost whenever one seeks health care services; members pay a fixed monthly fee disregardless of the amount of money for health in a month. Likewise, the most expedient feature of POS is that it has no deductibles (Harrelson, Greg, & Winterstein, 2009). On the negative side, all these plans have some accompanying disadvantages; HMO is tightly controlled making it hard to obtain immediate health care services, PPO covers very limited cost in the event that one seeks medical care from a provider outside the network while POS is tightly controlled as well as covers very limited when medical care is obtained outside the network (Harrelson, Greg, & Winterstein, 2009).
Chisolm, S. (2007). The Health Professions: Trends and Opportunities in U.S. Health Care. Sudbury, MA: Jones and barlett Publishers, Inc.
Harrelson, G., Greg, G., & Winterstein, A. P. (2009). Administrative Topics in Athletic Training: Concepts to Practice. Thorofare, NJ: SLACK Incorporated.