Managed care
In terms of using such a plan, unlike an HMO plan, which has a copayment cost share feature (a nominal payment generally paid at the time of service), a PPO generally does not have a copayment but offers a deductible and a coinsurance feature. The deductible must be paid in full before any benefits are provided. After the deductible is met, the coinsurance benefits apply. If the PPO plan is an 80% coinsurance plan with a $1,000 deductible, the patient pays 100% of the allowed provider fee up to $1,000. The insurer will pay 80% of the other fees, and the patient will pay the remaining 20%. Charges above the allowed amount are not payable by the patient or insurer but written off as a discount by the physician.
High-deductible health plan
High deductible health plans (HDHPs) have much lower premiums but high deductibles, co insurance and out of pocket maximums. Due to low upfront costs HDHPs are increasing in popularity with employers, with 24% offering some form of HDHP in 2013 (up from 5% in 2007). In this model, the individual assumes all medical costs until the minimum deductible is met. The Affordable Care Act (ACA), passed in 2010, has led to a significant expansion of HDHPs. The proposed replacement of the ACA will continue with expansion of the cost sharing model while reducing the financial subsidies for the out of pocket expenses of low income patients. Specifically, the bill repeals ACA cost-sharing reduction provisions after 2019.