Americans over and under 65 have two things in common in October. While seniors are signing up for health plans on Medicare, the requirement for everyone to have health coverage by Jan. 1 will send many people who are too young for Medicare to look for health plans on the marketplace launching Oct. 1.
Whether shopping Medicare or Obamacare plans, consumers will find more HMO plans -- the acronym stands for Health Maintenance Organization -- than ever before. Insurance companies generally price HMO plans more attractively because they have greater control over the costs.
For these plans, the insurance company creates a network of healthcare providers who agree to treat patients according to certain cost and quality control guidelines. A physician acts as the gatekeeper to health services such as referrals to a specialist in the network. In return for the guaranteed businesses, the providers give the insurance companies a discount, some of which passes on to the consumer.
Both the Medicare and Obamacare health plans come in two types: One, called a PPO (Preferred Provider), allows a greater choice of healthcare providers, charging more if you choose a doctor or hospital out of the network. The other, the HMO, is being marketed more heavily than ever as the healthcare industry adjusts to doing business under the Affordable Care Act.
As healthcare becomes increasingly 'managed,' rewarding doctors and other providers for restricting services to what's considered essential, seniors and under-65 consumers need to shop defensively. It's critical to look beyond the price tag of a health plan and find out what's covered for your individual situation.
"When surveying seniors in Broward County, most seniors quickly stated they didn't want
anything to do with HMO plans," reports Lou Mohammed of Fort Lauderdale's Insurance Medics, an agency selling all lines of insurance including Medicare and Obamacare health plans. An overwhelming number of seniors -- 77 percent -- said they dislike the requirement to obtain referrals to see a specialist," Mohammed says.
While seniors tend to have greater need for specialist care, the "gatekeeper" function of HMOs raises the most complaints from people of all ages. But HMOs can be effective for them, says Mohammed. The trick is finding the right one for your situation.
On the plus side, HMO plans usually offer lower copyaments. For seniors, some offer dental, vision or hearing benefits, or all three.
Some companies in the new healthcare marketplace are expected to offer only HMO plans. One that will offer a choice of narrow and broader networks is Florida Blue, according to the company's Vice President of Network Development, Andy Marino.
While HMO plans on the healthcare marketplace will have very narrow provider networks, Florida law requires them to guarantee access to all necessary services and providers within a reasonable geographic distance. Healthy people who are cost-conscious and don't require a particular hospital or doctor may find this option attractive.