The History of Hmo Plans

Aetna Health Insurance - The History of Hmo Plans

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Introduction:

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Aetna Health Insurance

Health Maintenance club Plans - Hmo Plans for short - are a type of managed care program. The idea behind managed care programs is that maintaining good condition will be achieved by preventing disease and providing potential care. By maintaining good health, it is believed that escalating condition care costs can be controlled.

When Hmo Plans were first introduced, members paid a fixed, prepaid monthly superior in replacement for condition care from a contracted network of providers. The contracted network of providers includes hospitals, clinics and condition care providers that have signed a compact with the Hmo. In this sense, Hmos are the most restrictive form of managed care plans because they restrict the procedures, providers and benefits by requiring that the members use these providers and no others.

History:

Hmos were intended to take condition care in a new direction. They were designed by the government to do away with private condition assurance plans and to make affordable condition assurance available to everyone. At that time employers were purchasing private condition assurance plans for their employees ~ a high-priced charge that many were beginning to forego.

The condition Maintenance club (Hmo) Act was popular ,favorite by President Nixon in 1973. The managed condition care plans were subsidized by the government and the new Hmo-type systems began to grow, typically organized by businesses and community groups eager to make condition care available to their workers and members at costs they could good afford. This subsidy created deals from the assurance clubs to lure these businesses to buy these new discounted low cost condition plans for their employees instead of the high-priced private condition plans.

Feeling the power of the government behind them and the frantic desire of employers to enroll their employees in these new Hmo Plans, assurance clubs began to apply pressure to doctors to join an Hmo. Doctors were told that if they didn't join, the assurance company would find doctors who would join and they would effectively take all their patients away.  Thus, doctors ended up joining an Hmo so they would not lose their patients and subsequently their entire practice. 

As time went on, the assurance clubs added more and more rules each time the doctor's compact was renewed. The popularity of the Hmo Plans meant that the majority of their patients had Hmo plans so they thorough the new conditions.  New terms included finding more patients, more stringent confidentiality agreements, and more services requiring pre-approvals.

Up until the 1980's most members agreed that Hmo's were a great condition plan. However, by the end of that decade, faced with mounting numbers of denied claims, members began to sour on the Hmo Plans.

What led to the increase of denied claims? It wasn't a corollary of the claims themselves; it was a corollary of bad investments by the assurance companies.

During the real estate boom, the assurance clubs conception it would be a good idea to spend in real estate deals.  Unfortunately, when the savings and loan business crashed along with real estate values, assurance clubs began to lose money. These losses resulted in their advent up short to cover the claims of their Hmo members. 

Thus began the convention to deny the claims of the Hmo Plan members. The assurance clubs denied claims on the basis that they were too costly or medically un-necessary. At that time, members and their doctors did not fight these denials and because the assurance company got away with the denied claim process so well, they have continued to do this as part of their operating procedure.

However, a new conception has sprung up in up-to-date year ~ Hmo Law.

There are now lawyers and law firms dedicated to bringing cases against Hmo's. These claims contain wrongful death, bad faith and curative malpractice. This means that an Hmo can be sued when a person dies as a corollary of the Hmo denying coverage for principal curative treatment; for the denial of valid claims; and for curative malpractice on the part of one of its physicians.

Additionally, private states are tightening up their laws governing Hmo Plans.

In time to come articles we will discuss how Hmo's work, the types of Hmo Plans, the cost of the plans and the time to come of the plans.

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