With community rated premiums, all groups pay the same. Experience rated groups pay based on the health and utilization of services of their group. HMO benefits usually include a full range of preventive and medical-surgical benefits. Differences between plans emerge in areas such as mental health benefits, pharmaceutical benefits, chiropractic benefits, dental, and vision care services. Many plans require patients to pay a small payment when they use services such as physician office visits or prescriptions.
Health plans track how much of the premium dollar is spent on health care.
The medical loss ratio is the percentage of the total premium dollar that is spent on medical services delivered to HMO members. In Pennsylvania in 1994, the median medical loss ratio for HMOs with at least 5,000 members was .82. That means that 82 cents of every premium dollar for that plan was spent on medical services. The high value in 1994 was .92 and the low value was .45. The health care industry is changing very rapidly with consolidations and new companies emerging frequently.