A 25-year-old woman comes to the office to follow up type 1 diabetes mellitus. She takes long- and short- acting insulin with good glycemic control and has no diabetes-related complications. She also has a history of hypothyroidism for which she takes levothyroxine. The patient has been covered under her parent's medical insurance for the last several years, but she recently started working full time for a company that provides a broad variety of employee insurance choices. She requests advice in choosing a health insurance plan. The patient has no disability and says that her main priority is low monthly payments. Which of the following insurance options would be most appropriate for this patient?
Types of health insurance plans | |||
PPO | HMO | POS | |
Monthly premiums | $$$ | $ | $$ |
Copayments & deductibles | $$ | $ | Variable |
PCP referral required for specialist visits? | No | Yes | Yes |
Size of "in network" provider panel | Large | Limited | Limited |
May go outside provider network? | Yes | No | Yes* |
*Requires additional out-of-pocket cost. HMO = health maintenance organization; PCP = primary care provider; POS = point of service; PPO = preferred provider organization. | |||
To keep expenditures below the total income from premiums, health insurance plans must limit total expenses (utilization) by enrolled patients. The 2 main strategies include increasing the patient's share of cost for the services they receive (eg, copayments, deductibles) and limiting the range of services patients may receive. A health maintenance organization (HMO) insurance plan has low monthly premiums, low copayments and deductibles, and low total cost for the patient. HMOs reduce utilization by confining patients to a limited panel of providers, requiring referrals from a primary care provider prior to specialist consultations, and denying payment for services that do not meet established evidence-based guidelines.
This patient's chronic conditions require daily medications, regular physician visits, and serial laboratory testing. In addition, diabetes can increase the risk of additional complications, increase utilization, and require specialty consultation. As a result, an HMO plan may provide this patient with the lowest monthly cost as long as she is willing to see only providers within the limited panel approved by the plan.
(Choice B) Medicaid is a joint federal and state program to cover low-income patients. This patient is unlikely to qualify for Medicaid due to her full-time employment and employer-sponsored health insurance.
(Choice C) Medicare is a federal health insurance program for patients who are age >65, disabled, or have end-stage renal disease.
(Choice D) Point-of-service (POS) plans are similar to HMOs in that they require patients to have a primary care provider and obtain referrals for specialty consultations. However, unlike an HMO, patients may also see out-of-network providers. POS plans typically have higher premiums than HMOs and significant costs if patients choose to see out-of-network specialists.
(Choice E) Preferred provider organization (PPO) plans usually offer the most flexible choices for both in-network and out-of-network providers. However, PPOs typically have higher premiums and deductibles than HMO plans.
Educational objective:
A health maintenance organization (HMO) is an insurance plan with low monthly premiums, low copayments and deductibles, and low total cost for the patient. HMOs reduce utilization by confining patients to a limited panel of providers, requiring referral from a primary care provider prior to specialist consultations, and denying payment for services that do not meet established guidelines.