[su_box title=”To sum it up…” style=”default”]
- Health insurance providers are organizations that issue policies and manage health insurance plans.
- Providers must have plans approved by federal and state marketplaces for sale through them.
- Health insurance providers use several forms of managed care including HMO and PPO.
- Providers organize resources through agreements into networks.
Health insurance providers are for-profit and non-profit organizations that offer health insurance plans to the public. Many are well-established household names in insurance. The state governments license insurance companies, and they oversee requirements for cash reserves and financial responsibility.
The health insurance providers develop plans sold through Medicare, Medicaid, the Obamacare Marketplace, and the state exchanges. Comparison shopping is a reliable tool for finding the best fit and highest values in health insurance plans.
Click here to find your state’s top health insurance providers and compare them for free!
Types of Providers
Many large insurance companies provide health plans. Most are for-profit companies, and others are non-profit organizations that provide a range of support services in addition to health plans. The providers develop plans for government approval. Their plans offer features that appeal to customers while saving costs and improving returns for the private for-profit organizations. The items below describe the basic types of managed care.
- The HMO is the Health Maintenance Organization. This type of plan uses a primary care physician to order care. The Primary care physician can make referrals to other network resources. The HMO does not cover the use of outside medical care providers. The HMO offers low pricing when using network resources.
- The PPO is the Preferred Provider Organization. This type of plan does not user a primary care physician and customers can select any network resource. The PPO covers outside resources but at a much lower rate of insurance payments. The PPO grew in contrast to the HMO; it offers more freedom of choice for the consumer.
- The EPO is the Exclusive Provider Organization. This type of plan uses network resources and does not cover outside doctors and specialists. The EPO offers savings when using network resources including low prices, low coinsurance, and few copays.
- The FFFS is the Fixed-Fee-for-Services organization. This type of managed care offers the limits on medical care providers while giving customers the freedom to choose sources of care. The network consists of medical care providers that agree to a fixed price for services. The Original Medicare is an example of a Fixed-Fee-for-Services network. Customers can choose any medical services provider that accept Medicare.
- The POS is the Point of Service organization. This type of managed care uses a primary care physician to order care. The Primary care physician can make referrals to network resources, and the customer gets the plan’s lowest prices. The Primary Care Physician can refer members to outside specialists, and the insurance plan provides coverage.
Provider Resources in the Networks
Health insurance providers operate their plans through networks of medical services providers. These include doctors, hospitals, specialists and other support institutions. The medical services providers join a network which offers low pricing to the insurance company in exchange for high volumes of customers.
Health insurance providers have constant pressure from the governments to keep the price low. One popular method to control costs is the trend towards narrow networks. The narrow networks offer fewer choices than traditional networks and slightly lower prices.
The trend towards narrow networks is particularly high among HMO types of organizations. PPO’s also use them, and when customers use outside resources, they pay more. They also pay more in the sense that outside spending does not count towards the overall limit on out-of-pocket expenses.
Qualified Health Plans
Health insurance providers must meet the requirements of the Affordable Care Act. This means that the plans must be qualified health plans within the rules and requirements of the law. The Affordable Care Act changed the insurance business in many basic ways. The sufficiency of plans was a major reform. The definition of qualified health insurance includes the below-listed items.
- Minimum actuarial value is an average ratio of 60 percent insurance payments to no more than 40 percent of customer payments for covered benefits. Policies must have a 60 percent or higher minimum value to pass the requirement.
- Minimum Essential Coverage is a listing of approved programs and sources. They include Medicare, Medicaid, employer plans, and federal government employee plans.
- Essential Health Benefits are the health and medical benefits that must be in a plan for effective coverage. These reflect the years of experience with large group policies such as among large employers that provide health insurance.
- Limits on Expenses are important for consumers. Once past these limits, the insurance company must pay all of the costs for a covered benefit. The plans must have limits on out-of-pocket costs including deductibles, coinsurance, and copays
Medicare Advantage Providers
The private insurance companies that provide health plans for Medicare Advantage have to pass reviews by the Centers for Medicare and Medicaid. This review is essential for approval but also for the integrity of the programs. Once in place, members rely upon their plans for critical medical services.
Medicare Network Reviews
The CMS pays special attention to Medicare Advantage plans. When the insurance providers present plans, they must indicate the state of the supporting network.
When they offer a network that has not been built at all or is partially complete, the CMS imposes a further requirement.
Incomplete networks must make an undertaking to pay at the Point of Service for needed resources for at least the same rate that would be paid by Original Medicare.
Government Oversight Over Plan Providers
The Centers for Medicare and Medicaid perform reviews of plans on an annual basis. They review the presentations from health insurance provokers. They ensure that the plans meet the rules and letter of the Affordable Care Act.
The CMM do not perform an active purchaser role but are also not a mere warehouse to pass through plans. They have a plan to be more assertive in the process.
Designed for Appeal
Health insurance providers can work with the Affordable Care Act to devise plans that offer advantages to the consumer beyond health insurance coverage. One such arrangement is the High Deductible Health Plan that combines with a Health Savings Account.
This combination can work for policyholders that wish to have low premiums and help with expenses. The Health Savings Account permits payment of deductible expenses with tax-advantaged savings. These plans reduce taxes and pay out-of-pocket costs.
Obamacare and Medical Underwriting
Obamacare changed the rules on accepting applications. Before 2010, insurance companies used medical underwriting to decide whether and at what price to accept an application. Often, they refused to accept and left applicants without coverage.
Obamacare requires acceptance and disallows the use of medical underwriting for selection or price. The individual factors permitted by Obamacare are age, location, and tobacco usage. The rules permit using underwriting for Medigap supplemental insurance.
The Individual Mandate
Just as insurance providers can no longer refuse applicants because of medical histories, applicants can no longer go uncovered. Those that fail or refuse to get and keep qualified health insurance must pay the individual shared responsibility penalty.
Health insurance companies must compete for the young, healthy applicants while offering fair terms to every plan’s group of members.
Health Insurance Providers Sell Qualified Health Plans
The health insurance providers that participate in the Obamacare markets sell approved policies that meet the requirements for qualified health insurance. The law changed the entire industry to the point that most policies are qualified insurance.
Insurance providers must post policies on the federal or state exchanges to help customers get financial assistance such as premium tax credits. Comparison shopping has proven effective in finding the best solution for health insurance for a family or individual situation.
Comparison shopping can focus on the parts of health plans that are most important to the customer. Click here to compare quotes for free with your zip code!
[su_spoiler title=”References:” icon=”caret-square” style=”fancy” open=”yes”]