Comprehensive Utah Health Insurance Market by Plan Types

Comprehensive Market by Plan Types

In this report, comprehensive health insurance plans are classified into five major plan types: Fee for Service (FFS), Preferred Provider Organization (PPO), Health Maintenance Organization (HMO), Health Maintenance Organization with Point of Service features (HMO with POS), and HSA eligible High Deductible Health Plan (HDHP). These plan types differ in the amount of managed care used to maintain quality and manage the cost of health care services. The term "managed care" refers to the methods many third-party payers use to ensure quality care (such as disease management programs) and to reduce utilization and cost of health care services (such as pharmacy benefit managers and medical review boards). HMO plans generally have the most management of care; whereas FFS plans generally have the least.

A Fee for Service plan (FFS) refers to a traditional indemnity plan. Under a FFS plan, members can use any health care provider they choose (as long as the services are a covered benefit on the insurance contract). There are no preferred provider networks and all services are reimbursed at the same cost sharing level (usually a fixed percentage of billed charges).

A Preferred Provider Organization plan (PPO) refers to a health plan that offers a network of "preferred" providers that have contracted to provide health care services for a reduced fee. Members have financial incentives to use this network of preferred providers, as costs for health care services are typically lower. Members are also free to also use providers outside of the network, but services are reimbursed at a lower rate and members must pay a larger portion of the cost for health care services. PPO plans usually include deductibles, co-pays, or coinsurance. This category includes PPO plans where members must obtain preauthorization prior to using non-preferred providers.

A Health Maintenance Organization plan (HMO) refers to a "prepaid" health insurance plan where policyholders pay a fixed monthly fee for comprehensive major medical coverage. A HMO plan usually covers more preventative care services than other kinds of plans, but also manages care more than other kinds of plans. Services are provided through a network of health care providers that have negotiated a fee schedule with the HMO. Members enrolled in the plan generally pay a fixed co-pay for physician visits and drugs. Services are usually not available outside the provider network, except for emergencies.

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