A Health Maintenance Organization (HMO) is an organization that provides managed care for health insurance contracts with health care providers (hospitals, doctors, etc.). Unlike traditional insurance, an HMO covers only care rendered by those doctors and other professionals who have a contract with the HMO to treat patients in accordance with the HMO’s guidelines, the only exception is Emergency Room services. Most HMOs require members to select a primary care physician (PCP), a doctor who acts as a “gatekeeper” to direct access to medical services. HMO’s patients need a referral from the PCP in order to see a specialist in the network. “Open access” HMOs do not require PCP to obtain a referral to see a network specialist. The patient is not responsible to complete any claim form and is protected from provider’s balance billing if the services where authorized by the health plan (including emergency room services).
A point of service plan (POS), is a type of managed care health insurance system. It combines characteristics of both the HMO and the PPO. Members of a POS plan do not make a choice about which system to use until the point at which the service is being used. When the patient enrolls in a POS plan, they are required to choose a primary care physician (PCP) from within the health care network. The PCP issues the referrals to the specialist and the patient may at that “point of service” select to use an in network specialist (at a lower co-payment/cost) or a specialist outside the network (at a higher out of network cost). If the patient chooses to go outside the network, it is the patient’s responsibility to fill out the claim forms, send bills in for payment, and keep an accurate account of health care receipts.
A preferred provider organization (PPO), sometimes referred to as a participating provider organization or preferred provider option, is a managed care organization of medical doctors, hospitals, and other health care providers who have contracted with an insurer or a third-party administrator to provide health care at reduced rates to the insurer’s or administrator’s clients. PPOs tend to have slightly higher premiums than HMOs and other more restrictive plans, because they offer patients more provider network flexibility. The patient is responsible to fill out the claim forms, send bills in for payment, and keep an accurate account of health care receipts.
A health savings account (HSA) is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a high-deductible health plan (HDHP). The funds contributed to this type of account are not subject to federal income tax at the time of deposit. The funds roll over and accumulate year to year if not spent. HSAs are owned by the individual and funds may currently be used to pay for qualified medical expenses at any time without federal tax liability or penalty. Withdrawals for non-medical expenses are treated very similarly to those in an individual retirement account (IRA) in that they may provide tax advantages if taken after retirement age, and they incur penalties if taken earlier.