There are two types of basic managed healthcare that are called indemnity plans. These indemnity plans are Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO). These plans are called fee-for-service plans and are designed to provide health care services to those who need their services. Each plan offers the same basic services, but is different on certain aspects of their coverage. Offering a much higher level of insurance coverage than other traditional indemnity plans HMOs contracts with providers who render service. If an insured HMO is being referred or needs special medical treatments, a specialist will be provided through HMO. The insured HMO member is covered for the necessary treatments and visits to the provider. Providers are called groups under HMO and PPO indemnity plans.
HMO
HMOs provide their members with coverage in the case of referrals and specialized medical treatment. Working with salaried providers, insured members are treated within a clinic or other medical facility by a HMO preferred provider or HMO group providers that are contracted with HMO. HMO is classified as a managed care organization that provides health care services to their insured members. There are three types of HMOs, group model, staff model and individual practice associations. HMO is a indemnity plan that offers a higher level of healthcare to their members, while still having lower premiums. Healthcare providers are contracted within the HMO and PPO indemnity plans.
PPO
Preferred Provider Plan (PPO) is also called an indemnity plan and like an HMO it contracts with a set network of health care providers for set fees. PPOs are essentially a hybrid mix of HMOs and other traditional healthcare plans. They are a network of independent healthcare providers that are called in-network providers. PPO insured members pay a higher out of pocket fee if they choose a provider for healthcare outside of the PPOs network of healthcare providers. In doing so, they may even find that their healthcare benefits may be reduced. Only when a PPO insured member seeks the medical services inside of the network of healthcare providers under their plan, will they be provided with healthcare at a discounted rate. HMO and PPO indemnity plans are just a few of the healthcare insurance organizations available to those who are in need of qualified healthcare services.
