Introduction to Managed Care Health Insurance Plans
Part 2, Chapter 7: Managed-Care Plans Page 1
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Summary
The introduction of managed care plans -- sometimes referred to as MCOs (Managed Care Organizations) -- has resulted in enormous changes in the American system of health care.
Originally, managed care referred almost exclusively to HMOs (Health Maintenance Organizations). However, over the past decade the concept has expanded significantly. In addition to HMOs, the term "managed care" is now often used to refer to any health plan that has a network of doctors, hospitals, and testing centers, and provisions such as a requirement for pre-authorization prior to specific treatments, tests, or services.
At this point, in addition to standard HMOs, managed care plans also include
- HMOs with a Point-of-Service (POS) Option;
- Medicare HMOs;
- Medicaid HMOs;
- Preferred Provider Organizations (PPOs).
Managed care also includes a number of plans that combine various approaches. These days, the term managed care is sometimes used to refer, as well, to those aspects of traditional health insurance policies that have incorporated selected managed care provisions. Such provisions may include requirements for pre-authorization prior to hospital admission, expensive tests, physical therapy, or psychiatric treat treatment. Some more traditional health insurance plans may also have a provider network. Although consumers who are enrolled in such plans can use non-network providers whenever they wish, consulting providers who are part of the plan network may offer additional cost savings.
At present, approximately 70% of all employees in America who work for medium or large companies are participants in managed care programs of some type. As private managed care plans expand, as the number of Medicare HMOs increases, and as states require a larger percentage of Medicaid recipients to join Medicaid HMOs, managed care is likely to play an increasingly important role in the American health insurance system.
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