Health Insurance paper

Submitted By amandacantrell1
Words: 2121
Pages: 9

Point-of-Service Plans
Overview
These products are designed to capture the best features of the HMO without its rigidity.
The expanded participant choices and ease of plan design are assets with the point-ofservice product.
The point-of-service product is currently enjoying a great popularity because it is positioned somewhat centrally in the continuum of benefits and freedom of choice.

Description of Product
The reason for the name is simple: participants have the freedom to choose the level of benefit they receive each and every time they seek medical services. There is not just one point-of-service product, but rather several:



One. HMO-oriented (dual option of HMO or indemnity).
Two. Self-funded plan oriented (triple option of HMO, PPO or indemnity).

Regardless of the variations, all point-of-service products have the following characteristics in common:




HMO-type enrollment with a primary care physician assigned. This is the socalled gatekeeper.
Plan design aimed at curbing or punishing out-of-network care and encouraging in-network care.
Choice by participants whenever care is sought.

The point-of-service plan is similar to the traditional HMO with these important differences: •



A Point-of-service plan has a gatekeeper physician who controls access to the plan's provider network. The doctors in the plan are generally paid on a capitation basis, which means they get a set fee per person regardless of the amount of service they perform. This exposes them to some financial risk for the services rendered, thus giving them an incentive to control utilization.
Employees are permitted to use non-network physicians or hospitals, but are exposed to higher co-payments and deductibles, with participants responsible for as much as 30% of the charges they incur. But when care is obtained through the gatekeeper and network providers, no deductibles and lesser co-payments apply. Point-of-Service Plans

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©2003 International Foundation of Employee Benefit Plans, Inc. All rights reserved.

Point-of-service plans are offered by insurers that have developed networks of physicians and hospitals, as well as by HMOs that have existing provider networks. Insurers have an advantage in that they are better equipped to pay claims for non-network care, an important feature of point-of-service plans.
There is insufficient experience with point-of-service plans to know if they represent a real breakthrough or not. Companies considering such plans should be aware of problems that can develop in the following areas:




Network that is not adequate for territory to be covered.
Difficult claims administration problems.
Need for special education and training on everyone’s part.

Why Product Created
Employer-plan sponsor cared about over-restricting the patient's choices. Too little choice with too much savings was rejected by the employer. The point-of-service product gives a more balanced product than the alternatives.
The single precipitating issue that created point-of-service was the HMO practice of permitting no benefits if the HMO primary physician was bypassed.

Advantages of the Product



Primary care physician continues to play a critical role in health care; the presence of the gatekeeper reduces costs by 5-15%.
The steerage is consonant with both quality of care and freedom of choice.

Typical Goals of the Product
The state goals of a large employer with such a plan were as follows:






Emphasize quality and family values.
Establish one plan for all employees.
Include wellness and behavior programs.
Beat inflation in matters of cost control.
Achieve effective communications.

Popularity of Product
Point-of-service plans with less restrictive coverage than that offered by standard
HMOs are the fastest growing segment of the HMO market.
Point-of-Service Plans
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©2003 International Foundation of Employee Benefit Plans, Inc. All rights reserved.

Nearly 40% of HMOs currently offer an open-ended option, up from…