What Is Managed Care?

Remember when a phone call cost a dime? When $10 could get three people into the movies, and you’d still have cash left over for popcorn and soda?

If you think everyday prices are out of control, did you know that the cost of healthcare rises three times as fast as the cost of almost everything else in the country?

Managed care was introduced as a way to bring healthcare costs under control. There’s a lot of debate about whether it’s worked or not. One thing is certain: for most people, enrolling in a managed care plan is the most affordable way to get access to healthcare.

How Managed Care Works

Managed care plans work by creating “networks” of doctors, hospitals, and other providers. These care providers agree to provide their services to plan members at a discount. In exchange for the discount, the providers get more referrals and more business. When it works right, it makes perfect sense: more business for providers, lower payouts for the plan, and lower premiums for the plan members. Everyone wins.

Managed care also makes use of a process called “utilization review.” This involves making sure that healthcare is used appropriately. Originally introduced as a way to reduce spending in the Medicare system, utilization review has become part of mainstream healthcare.

In managed care plans, almost any care that goes beyond preventive care is subject to approval. For most specialist care or hospital treatments, you need a referral from your primary care physician in order for the treatment to be covered. More complicated — and expensive — procedures may require approval from the plan administrators.

Some people find the restrictions of managed care difficult to navigate. But for most, the tradeoff in savings is worth it.

Picking The Right Plan

The amount of flexibility you need in your healthcare will determine the kind of plan should get.

If you’re looking for a plan that will save you the most money, an HMO is probably your best bet. HMOs usually have the lowest out-of-pocket costs, but they also have the most restrictions.

If you need more flexibility, POS or PPO plans are a good choice. They save you money when you get care within the plan network, but they also provide coverage for “out-of-network” care. This gives you more freedom over the providers you choose, and means you don’t have to wait around for approval before seeking treatment.

To find the right plan, you should work with a professional health insurance agent. An agent can help you sort out your healthcare needs, and find you a plan you can afford.

Best of all, you can use our free health quote service to easily compare plans from multiple agents. Because agents represent different insurance companies, you’ll get to see which company offers the lowest-cost coverage. All you have to do is fill out a short form to request your free quotes.