Today's Health Insurance Environment and
What is Happening Today?
HMO plans have been very popular since the early 1990s. Their less expensive cost and comprehensive medical coverage became the mainstay for price conscious individuals and employers. However, there is now a resurgence back to PPOs and other less restrictive types of health plans. There are several reasons for the movement away from HMOs:
- Rising complaints about HMOs denying medical care and congress’ attempt at a Patient’s Bill of Rights have created negative publicity for HMOs
- Some people have grown tired of the restrictions placed by HMOs on which physicians or specialists they can see
- Physicians often complain about the low HMO reimbursement capitation rate and many have decided to cancel their HMO contracts
However, HMOs are still the least expensive type of health plan in the market place, and they are far from a dying breed. HMOs are satisfactory health plans for those individuals who are not very sick, do not see a physician often, and are not loyal to a particular physician. HMOs are also attractive due to their low out-of-pocket expense, as a patient is only responsible for a minimal copayment of $5.00 to $20.00.
As a physician, unless you have a stronghold on the market, you may be inclined to accept an HMO contract to attract additional patients to your practice. If this is the case, it is crucial that the payment rate covers the costs and that the utilization can be controlled. Managed Care is here to stay and the better you are prepared, the better you will be in creating a lucrative medical practice.