Coverage Plans in the Market
Managed care is the coordination of coverage to improve the quality and accessibility of medical care and control spending through various public and private managed care plans (Gifford, Smith, Snipes & Paradise, 2011). Over the last decade, there has been a significant increase in the number of managed care plans available in the healthcare market. The main coverage plans include the preferred provider organizations (PPOs), the health maintenance organizations (HMOs) and the prospective payment systems (PPSs).
An HMO cover is a coverage plan that combines both financing and care delivery systems (Gifford et al., 2011). Its members pay a certain monthly premium and receive health care services including specialist services, which are provided by the provider’s health care staff. Generally, HMOs finance primary care physician (PCP) services. Under this plan, the insured individual makes certain co-payments, which lie between $ 10 and $20 and annual deductibles of between $200 and $500 respectively (Gifford et al., 2011). In contrast, in a PPO plan, members are not required to pay monthly premiums to receive coverage. Instead, enrolled members pay annual deductibles of between $200 and $1,500 (called ‘first dollar’ costs) while the provider pays the rest (Gifford et al., 2011). The member also makes “a co-payment of between $15 and $30 to see ‘preferred’ provider specialists” (Gifford et al., 2011, p. 6). On the other hand, in a PPS plan, the medical care costs are based on the cost of the services received (Gifford et al., 2011). Thus, this plan is expensive as payments are determined by the cost of the services received.
Recommended Coverage Option
The writer recommends an HMO coverage plan for the family members in the case study. With an annual family income of $56,000, an HMO plan is the most affordable since its annual deductibles are low ($100-$500) compared to a PPO plan ($200-$1500). Moreover, the co-payments in an HMO plan can go up to a maximum of $20 while a PPO’s co-payments can reach $30. Since the parents and two children only need primary health care services, there is no need to pay for specialists from other health care institutions (Saucier, Kasten, Burwell & Gold, 2012). The provider’s primary care physician can give specialist care to the asthmatic boy. Thus, the family will not pay additional co-insurance payments. On the other hand, a PPO plan will mean that the family pays up to 50 percent more for services sought from specialists outside the provider organization. A PPS plan will be expensive for this family as the monthly payments for the asthmatic boy will be tied to the cost of managing his condition.
The ACA Act
The Affordable Care Act (ACA), whose implementation is underway, will have a significant impact on health care coverage in America. In particular, the Act proposes “tax credits for the middle class population with a family income of 400 percent of the poverty line, which translates to $88,000 for a family of four and $43,000 for an individual” (Kaiser Commission on Medicaid and the Uninsured, 2010, p. 3). In the case study, an annual family income of $56,000 means that the family will benefit from the tax credits. Thus, beginning 2014, the family will pay less monthly premiums because of the tax credits. The family will also benefit from reduced copayments and deductibles once the provisions of the Act are implemented.
References
Gifford K., Smith, V., Snipes, D., & Paradise, J. (2011). A Profile of Medicaid Managed Care Programs in 2010: Findings from a 50-State Survey. Washington, DC: Kaiser Family Foundation.
Kaiser Commission on Medicaid and the Uninsured. (2010). Medicaid and Managed Care: Key Data, Trends and Issues. Washington, DC: Kaiser Family Foundation.
Saucier, P., Kasten, J., Burwell, B., & Gold, L. (2012). The Growth of Managed Long-Term Services and Supports (MLTSS) Programs: A 2012 Update. New York: Truven Health Analytics.