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What Are the Types of Medicare Managed Care?

Medicare provides for the health needs of millions of Americans over the age of 65 or with special medical requirements. However, there are a lot of holes in the system that have spawned a lot of different stop-gap solutions.

One of the more popular solutions has been Medicare Managed Care, which essentially combines Medicare benefits with a full third party medical insurance package, keeping all of your health care coverage in one place. There are several types of Medicare managed care to choose from.

  1. Health Maintenance Organization (HMO)

    • A Health Maintenance Organization (HMO) plan is the least expensive Medicare managed care plan, but it also carries the most restrictions. The biggest restriction is that the HMOs only work with a limited number of physicians and medical facilities in a given area. Furthermore, you must choose one of those physicians as your primary care giver and seek his or her medical opinion and approval before going to see a specialist.

    HMO with Point-of-Service Option

    • An HMO with a point-of-service option allows members to seek medical care from physicians outside their own network and to see specialists without the approval of their primary caregiver. However, coverage for such visits is lower, and the overall insurance plan is more expensive. Not all HMOs offer a point-of-service option.

    Preferred Provider Organization (PPO)

    • A Preferred Provider Organization (PPO) plan is very similar to an HMO point-of-service plan, but with even fewer restrictions on members seeking medical care outside the network. With greater flexibility comes higher costs; PPO plans usually carry a high premium, as well as higher co-payments.

    Provider Sponsored Organization (PSO)

    • A Provider Sponsored Organization (PSO) managed care plan cuts out the HMO middleman completely. A PSO is a network of physicians and medical facilities that contract directly with patients. Often that means even fewer options when choosing a health care physician or specialist than provided by HMOs. But this kind of system works well for smaller urban and rural areas that don't have many physicians to begin with or where there is no HMO present.

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