Health Insurance - Choosing Managed Care Organizations

Managed care organizations (MCOs) are the root of most modern health insurance companies. The goal of MCOs was originally to reduce the cost of health care by controlling the types of procedures doctors and patients chose to use. MCOs eventually morphed into health management organizations (HMOs) and preferred provider organizations (PPOs), but the goal of any type of MCO is essentially the same. When choosing an MCO, be aware of the following guidelines.

  • You pay for flexibility - PPOs are generally more flexible, allowing you to see a wider range of doctors. This flexibility comes at a cost, though, and your premiums will jump up if you opt for the PPO option.
  • You have a role in reducing your costs - The point of MCOs was to reduce the cost of health care through smart decisions. However, they have largely failed to meet this goal, and many say they have made health care more expensive. The theory behind the reduction, though, is still solid. Making better choices about which procedures are truly necessary and which are optional will reduce your health care costs each year.
  • Going uninsured is a bad idea - Having no affiliation with a health care company can mean you will be turned away from a doctor's office or charged exorbitant amounts for routine procedures.
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