Types of Health Insurance

Preferred Provider Organization (PPO) - provides a list of contracted "preferred" providers from which to choose. You receive the highest monetary benefit when you limit your health care services to those providers on the list. If you go to a doctor or hospital that is not on the preferred provider list referred to as going "out-of-network", then the plan covers a smaller percentage of your health care expenses or may cover none of your health care expenses based on the contract wording of the plan. Always check with your PPO or consult your list of preferred providers before you seek health care services to make certain your physician or hospital is a contracting provider (part of the network). Make sure that your doctor refers you to health care providers within your PPO network, if applicable.

PPOs in California can be regulated by either the CDI or the Department of Managed Health Care (DMHC) depending on whether the underwriting company (the company backing the policy) is a licensed insurance company or a managed care company. The DMHC has sole jurisdiction over Blue Cross/Blue Shield PPO health plans. If you are confused about whom to call regarding a PPO problem or concern, then consult your plan documents for regulatory information.

Important Points to Remember About Preferred Provider Organizations:

• You receive the highest monetary benefit when staying within the PPO network.
• You may have the option to go outside the PPO network at a higher monetary cost to you.
• You should consider checking if your doctor or any specialist referred to you is part of the PPO network before utilizing covered services.
• You can seek the assistance of the DMHC on all Blue Cross/Blue Shield PPO health plans.
• You can contact either the CDI or the DMHC for clarification regarding PPO issues.

Health Maintenance Organizations (HMOs or Managed Care) -
Membership in a Health Maintenance Organization (HMO) requires plan members to obtain their health care services from doctors and hospitals affiliated with the HMO. It is common practice in HMOs for the plan member to choose a primary care physician who treats and directs health care decisions and who coordinates referrals to specialties within the HMO network. The doctors and hospital personnel may be employees of the HMO or contracted providers. Since HMOs operate in restricted geographic regions, this may limit coverage for plan members if medical treatment is obtained outside the HMO network or coverage area. California HMOs are required to cover medically necessary emergency services even when outside of their coverage area. The intent of managed care products is to create less costly delivery of health care services while maintaining quality health care by specifying provider choice. HMOs offer access to a comprehensive package of covered health care services in return for a prepaid monthly amount (premium). Most HMOs charge a small copayment depending upon the type of service provided.

All HMOs in California are regulated by the Department of Managed Health Care (DMHC). If you have a complaint with an HMO, contact the member services department of your HMO. HMOs are required to have an internal complaint/grievance process in place. If you file a grievance and it has not been resolved within 30 days or there is some question as to the HMOs decision, then you may contact the DMHC for assistance.

Important Points to Remember About Health Maintenance Organizations:

• You must obtain health care services from HMO providers, except in certain emergency situations.
• Your choice of primary care physician is important because he/she directs your care. Also, your primary care physician often coordinates referrals to specialties within the HMO.
• Your options may be limited by the geographic restrictions of the HMO network.
• You may be charged a small copayment each time you utilize an HMO covered service.
• You can seek assistance from the DMHC on all HMO and managed care questions.

Source:  California Department of Insurance