More Types of Comprehensive Utah Health Insurance Plans

A Health Maintenance Organization with Point of Service features plan (HMO with POS) is a type of licensed HMO. A HMO with POS refers to an HMO plan that gives members the option to use providers who are outside of the HMO network for certain types of medical services (not emergencies), but at a lower reimbursement rate where members bear a larger portion of the cost for health care services. Except for this out of network option, a HMO with POS functions like a standard HMO.

A HSA eligible High Deductible Health Plan (HDHP) is a new type of insurance product recently authorized by the federal government. High deductible health plans are comprehensive health insurance plans with deductibles and limits that are much higher than traditional insurance options. Comprehensive health insurers have offered insurance products with higher deductibles in the past, however, one of the key features that make these plans different is that the deductible levels of these plans are set by federal statute and plans that comply with federal guidelines are eligible for use with a savings vehicle called a Health Savings Account (HSA). Payments made into a HSA are tax deductible and can be used to pay for current health care expenses or saved for the future. When the health care expenses reach the level of the deductible, the high deductible health plan pays for covered health care expenses beyond the deductible. High deductible health plans can also be used in conjunction with Health Reimbursement Arrangements (HRA). HRAs are similar to HSAs, except the employer owns the savings account (rather than the employee) and only the employer can deposit funds into the account.

HMO, HMO with POS, and PPO plans are considered managed care plans. FFS plans typically do not involve any form of managed care. Approximately 89 percent of Utah's comprehensive health insurance market involves some type of managed care; with more than 65 percent of the comprehensive health market in a HMO or HMO with POS. About 1.9 percent of the market had a HDHP plan.

Premium per member per month was higher for PPO and HMO plans compared to the other plan types, while HMO with POS plans were the lowest among traditional insurance products. The new HDHP plans reported the lowest premium among the various types of plans. Caution should be used in drawing conclusions from this data, however. This comparison does not control for differences in plan structure, covered benefits, health status, or demographics. For example, one reason HDHP plans have lower premiums than other plans may be the higher deductible. When a member accepts a higher deductible, the insurer pays for fewer health care services and the member is responsible for a larger portion of their health care expenses. Thus, the insurer bears less financial risk, which is reflected in a lower premium.

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