When it comes to insuring ones health there’s no denying the fact that this form of insurance is a must for everyone even though it’s not legally required and is purely optional. It’s hard to imagine the current healthcare system without insurance because otherwise people couldn’t afford most medical services and doctors wouldn’t get their high salaries, which are among the highest all over the world. Thanks to insurance both customers and service providers are pleased, and everyone’s getting the thing they want. Among many types of insurance available managed care plans are the most widespread, so let’s take a closer look at some of the most common forms of insurance offered by insurers:

Health Maintenance Organizations (HMO)

This is the most common form of managed care plans as it provides the lowest price and a wide range of services included. It’s main drawback is the lack of flexibility in what concerns the places you get care from. Under HMOs you are limited to a network of facilities and specialists you may get care from and covered to the full extent. If you choose to get your services from someone outside the network your costs won’t be covered at all. Moreover, you are required to choose a primary care physician who will refer you to all the required specialists, so there’s more paperwork involved with this type of plans. Yet, you usually pay lower premiums for that so it’s really worth the effort.

Preferred Provider Organizations (PPO)

Preferred Provider Organizations offer more flexibility but for a higher price if compared to HMO plans. You are still limited to a network of providers to get care from, however if you choose to go out of network there will still be some part of your bill covered only to a lesser extent compared to in-network services. And you aren’t obliged to choose a primary care physician so there’s not so many office visits to do under this type of managed care plans. If you have the additional money and want more flexibility with your health insurance this plan type will definitely appeal to you.

Point Of Service (POS)

Point Of Service plans are often referred to as a mix of HMO and PPO plans as they provide the benefits of both these forms of health insurance. You gain the flexibility of PPO in what concerns the places you get services at, yet you still have to choose a primary care physician and have a network of providers to work with. One of the greatest benefits is that you may choose your family doctor as a primary care physician even if he or she doesn’t make part of the insurer specified network, which is definitely appealing to those who have long term relations with their family doctors. PPO plans may vary in price so it’s really recommended to shop around if you want to get the best rate possible.

As you see, managed care plans come in different forms with the sole purpose of giving you exactly what you need. So it’s really important to assess your individual health insurance needs before choosing the plan type to address them adequately.

Health insurance ranks very high on most people’s list when they are seeking a job. By offering health insurance you can attract the highest quality employees to your business. Don’t think you have to offer the traditional health insurance option though. Even the large companies are finding it too expensive to offer that sort of plan these days. Instead, most small businesses offer one (or more) of three different plans: HMO, PPO, and POS.

Health maintenance organizations (HMO): An HMO consists of a network of doctors and hospitals. While the least expensive, it also has the least flexibility for your employees. The basic premise is participants choose a primary care physician (PCP) and then get referrals to other specialists.

Preferred provider organizations (PPO): This is the most frequently chosen option by small businesses owners. A PPO consists of doctors and hospitals willing to offer care to members at a lower cost. It’s a little more costly to you but provides far more flexibility than the HMO. Your employees select health care professionals associated with the PPO and then pay a low deductible and very low (if any) co-insurance (the amount they have to pay after the deductible is satisfied).

Point of service (POS): A POS plan offers the benefits found both in HMOs and PPOs. Your employees still need to select a Primary Care Physician and get referrals to other physicians, but you can go outside the network without a referral and get most of your expenses reimbursed. POS plans are the most expensive of the three; both for you and your employees i.e. your employees have higher deductibles and co-insurance payments.

Small-group insurance generally applies to companies with as many as 100 employees, but the majority of companies seeking this type of insurance have two to 50 employees. In this market, health insurance prices have traditionally been based on two factors:

Estimated cost of medical services in a given geographic area Estimated utilization of services
Cost projections are about the same across the country. But projected utilization of services is where you are going to have the most variation in cost. Insurance companies base their estimation of utilization of services probability on a variety of factors’ ranging from the medical history of your employees and their dependents to age and gender. If you have someone on your staff that is considered high risk the whole group (you and your employees) is going to have to pay a higher premium. In larger corporations these people’s high maintenance costs are averaged out by the large number of low risk employees. For insurance companies there is safety in numbers.

Very small companies can suffer from high premiums if one employee has a serious illness because they just do not have enough people to spread the risk around. However, a group medical plan is a benefit that attracks and retains quality employees. It is a tough problem these days.