At the very bottom, minimum amount of health coverage is the Indemnity Plan. Indemnity type of health insurances indemnifies the beneficiary from financial costs associated with health care. The main aspect of indemnity health insurance was coverage for illness not necessarily for prevention or wellness. The insurance company would decide the maximum amount of billing charges and the provider was able to bill the beneficiary anything the insurance did not pay for. In some cases, the insurance company would pay the beneficiary and the beneficiary would have the responsibility of paying the provider.
On the other side of the spectrum is Health Maintenance Organizations. Health Maintenance Organization is a type of managed care organizations that provides a form of health insurance coverage that is fulfilled in hospitals, doctors, and other providers under contract. HMO is basically having the beneficiary pay for their coverage in advance rather than paying for each health services. Initially, the beneficiary would have to pay a price of a monthly premium and then HMO will offer a range of benefits from preventive care to full coverage. The main difference between HMO and PPO is the freedom of choice. HMO allows you to see doctors only within the HMO’s network but with PPO you can choose to see any doctor you wish but the coverage will result in higher out-of-pocket costs like copays and coinsurance.
In the middle, Preferred Provider Organizations (PPO) are contracted between employer health benefit plans and health insurance carriers in order to purchase health care services for covered beneficiaries from a selected network of participating providers. This is a health care plan that provides covered services at discounted costs for beneficiaries that use the in-network providers. Common key characteristics include a provider network. Most PPOs contract directly with hospitals, physicians, and other diagnostic facilities to establish a network in order to provide health insurance to beneficiaries. Another common characteristic is negotiated payment rates. The PPO provider negotiates lower overall fee arrangements with doctors, hospitals, clinics, and other health providers. Utilization management is another common characteristic of a PPO. A utilization management is in place in order to control cost of health services. PPO also allows consumers to have their own choice of whether or not they want to be covered by PPO providers or non-PPO providers. However, if the beneficiary chose to go outside of the network their cost-sharing rate will be higher than if they had stayed in-network. This is the health insurance coverage that Cooper-Pearson Sports Marketing should be providing to their employees. It is not as cheap as HMO but it gives the employees the freedom of choice unlike HMO. If the company is looking for a middle ground it is obvious that a PPO plan is the choice.
If Cooper-Pearson Sports Marketing is concerned with cost management in providing the best health insurance and a competitive pay for their employees, I suggest implementing a prescription drug program within their health insurance. In doing so, prescription drugs are categorized into three tiers or two tiers. The tiers are separated by prices so a generic brand would be the bottom tier and it would essentially cost much less than a name brand drug at the top of the tier. However, before allowing the beneficiary to prescribe to a top tier drug, they must first try out the generic brand. This allows the company to save money on prescription drugs.