This information should help you understand what the benefits and services offered by the plan are, how the plan operates and how responsive the plan is to the needs of its enrollees. The maximum dollar amount you will have to pay each year, after which the plan will cover all of your remaining medical expenses for the year. Unlike traditional plans, managed care plans contract directly with health-care providers to set payment for services. To join a provider network, most doctors and hospitals give managed care plans a discount from their standard fees. Managed care plans also keep costs down by restricting the use of more costly services such as hospital care.
Cost is the main reason.
Faced with rising healthcare expenses, employers are shifting to managed care plans to help keep their health-care costs under control. The main difference between these two plans is that HMOs require their enrollees to receive all of their care from within the plan's network, while PPOs give enrollees the option of using providers either within or outside of the plan's network of providers. An HMO offers a specific list of health services for a fixed monthly fee, or premium. This physician coordinates and authorizes all medical services, specialty referrals and hospitalizations. A PPO contracts with selected doctors and hospitals in the community.