There are many types of managed care plans offered by insurers. Some only provide coverage for services if the person insured sees a plan provider. Others allow the individual to choose any provider but provide additional benefits if a specific plan provider is used. HMOs provide coverage for a broad range of health care services when an insured person uses the services of a plan provider. An HMO is generally the most restrictive type of managed care plan.
Coverage is only available when the individual obtains services from a plan provider.
The insured person must also follow the HMO's procedures for obtaining services, such as obtaining a referral before seeing a specialist. In exchange for the limitations on the choice of provider, an HMO may provide coverage at a lower cost or may provide additional benefits. POS plans provide financial incentives to use network providers, but allow insured individuals to choose providers outside the plan. They are similar to POS plans in that they provide coverage regardless of the choice of provider, but generally will pay a larger portion of the bill if the insured person uses a provider selected by the plan. All managed care plans seek to provide medically appropriate services while at the same time controlling costs.