Florida 2-15 Life, Health and Variable Annuity AgentGeneral Knowledge of Health InsuranceMedium
A client is seeking a health insurance plan that offers comprehensive benefits, including preventive care, physician services, and hospitalization, with a strong emphasis on cost containment through managed care principles. Which type of plan is MOST likely to fit this description?
- ABasic Hospital Expense Policy
- BFee-for-Service Plan
- CIndemnity Plan
- DExclusive Provider Organization (EPO)
Show answer & explanationAnswer & explanation
Correct answer: D. Exclusive Provider Organization (EPO)
An Exclusive Provider Organization (EPO) is a type of managed care plan that offers comprehensive benefits through a network of providers. It emphasizes cost containment by requiring members to use in-network providers for all services, except in emergencies, without the option to go out-of-network for a higher cost, unlike a PPO.
Why the other options are wrong
- A. A Basic Hospital Expense Policy is a limited type of coverage, not comprehensive, and does not emphasize managed care principles.
- B. Fee-for-service plans offer less cost containment and managed care than an EPO.
- C. Indemnity plans are traditional fee-for-service plans with less emphasis on managed care or cost containment.
Exclusive Provider Organization (EPO)
A managed care plan that requires members to use doctors, specialists, and hospitals within its network, similar to an HMO, but generally does not require a primary care physician referral for specialists.
- In-network care only (except emergencies).
- No out-of-network coverage.
- Often no PCP referral required for specialists.
- Emphasizes cost containment.
Memory trick: Managed care: networks for savings, rules for care.