The health insurance industry has grown in the last few years as more and more people are learning about the rising healthcare costs, disease awareness leading them to buy health insurance policies for themselves and their family members. These factors encourage individuals to purchase more health insurance, and the health insurance market is experiencing significant transformations.
“In the last few years, we have seen large traction towards government programs like Ayushman Bharat, which has helped the health insurance to improve its penetration across the country. But there are other types of health insurance plans in the country, such as health maintenance organization (HMO), preferred provider organization (PPO), exclusive provider organization (EPO), and point of service (POS),” says Rakesh Goyal, Director – Probus.
As India continues to grow at a rapid pace, our health insurance market will also rise because more and more individuals want better health coverage. The article will briefly discuss the plans mentioned above and how they function.
Health Maintenance Organization (HMO) Under this plan, the policyholder gets comprehensive medical coverage from the insurers. In India, the availability of these HMOs is not as widespread as it is in the US. However, a limited number of insurance companies and third-party administrators (TPAs) offer these services. In very layman terms, such plans include doctors' visits, hospital stays, emergency care, surgeries, preventive care, check-ups, lab tests, among others. These are the same benefits that policyholders typically receive from standard comprehensive plans in our country. These plans require policyholders to utilise a range of medical facilities and services within the network, and generally, they do not receive reimbursement for non-emergency services rendered outside the network hospitals.
Preferred Provider Organization (PPO) PPOs differ significantly from HMO plans in that they allow for the selection of providers outside the network. Although they are advised to utilize the existing network of institutions, they may obtain treatment from outside the network. Nevertheless, this facility is associated with higher premiums for PPOs than for HMOs. Furthermore, the flexibility is accompanied by out-of-pocket expenses, which is why it is crucial to meticulously evaluate the advantages and disadvantages prior to purchasing any such policies.
Exclusive Provider Organization (EPO) EPO is a health plan that provides healthcare coverage through a network of providers in partnership with insurance companies. This can encompass a variety of healthcare providers, including hospitals, pharmacies, lab specialists, and other healthcare facilities. These plans offer a comprehensive selection of healthcare services offered within the network. Occasionally, these plans do not provide the option to seek non-emergency care outside of the network. “In general, an EPO plan does not provide coverage for treatment at hospitals or institutions that are not part of the approved network, with the exception of emergency situations. This distinguishes it from PPOs, which permit a more extensive selection of healthcare providers. Many EPO plans in India provide cashless treatment at network institutions, similar to PPOs and HMOs. Ultimately, this implies that the policyholder is not required to make an upfront payment; the insurance company directly settles the account with the healthcare provider,” says Goyal.
Point of Service (POS) POS is a combination of HMOs and PPOs, and some of the insurers do offer such plans in India. Simply put, POS are plans that offer treatment to the policyholder at the network hospitals. Like an HMO, POS plans encourage the insured to use the network for healthcare services to minimize costs. At the same time, POS plans are generally more affordable than PPO plans, as they focus on managing care within the network. Goyal says, “POS plans may offer cashless treatment at network hospitals, and the policyholder does not have to pay for treatment upfront, as the insurer settles the bills directly with the healthcare provider.”