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Managed Care Plan Types
NJ Individual Health Coverage Program Buyer's Guide

Individual plans may be purchased from a variety of carriers  with different types of managed care plan designs.  Managed care plans provide comprehensive benefits by contracting with a network of physicians, hospitals and other health care professionals.  There are several types of managed care plans.

HMO and POS Plans

The term Health Maintenance Organization (HMO) refers to a type of carrier, as well as the type of product that the carrier offers to customers.  An Exclusive Provider Organization (EPO) plan is a similar type of product offered by companies that are not HMOs.  HMO plans and EPO plans are designed similarly.  Both HMO and EPO plans include a network of physicians, hospitals and other health care professionals that provides medical treatment and care, subject to the terms of the individual plan.

Most of the time, you are required to choose a Primary Care Provider (PCP) from those participating in the network, and that PCP coordinates your health care, referring you to specialists in the network when necessary.  If services are not provided by the PCP or through the PCP’s referral, services are not covered, except for emergency medical care.  However, both HMO plans and EPO plans may offer coverage that does not require referrals, and some plans may not require selection of a PCP.  When an HMO plan or EPO plan allows covered persons to see providers in the network without referrals, the plans are often marketed as “direct access” or “open access” plans.  Healthcare services are not covered outside of the plan network, except in the case of an emergency.

Carriers may offer the HMO and EPO plans with copayment options (for example, $30 for all physician visits), but may offer other cost-sharing arrangements, including:
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A “split copayment” for physician services, where the copayment for use of a specialist may be higher than the copayment for a PCP visit. 

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A plan that applies deductible and coinsurance provisions to certain services (but deductibles, coinsurance and copayments cannot all apply to the same services or supplies).

Please note:  Carriers are not required to offer coverage to people who do not reside in the approved service area of a plan. 

Multi-Tier Plans

Carriers may offer plan designs that include multiple in-network tiers, with different cost-sharing requirements by tier.  Multiple tiers may apply to only a single category of providers (for example, hospitals), or to all categories.  For example, a carrier may offer an EPO plan that has X specialist physicians in tier 1, and Y specialist physicians in tier 2.  All of the tier 1 and tier 2 specialists are in-network, but the person might have a little less cost-sharing if they use the doctors in tier 1 than when they use the doctors in tier 2: perhaps a $30 copayment per visit to see the tier 1 physician versus a $50 copayment per visit to see the tier 2 physician. As with any EPO (or HMO) plan, services of specialists that are not in the network are not covered.          

Frequently Asked Questions About Managed Care Plans
Question 1: What plan should I choose if I want to keep my present doctors?

Check with your doctors to find out if they participate in the networks of the carriers offering any HMO or EPO plans listed on the New Jersey Individual Health Coverage Program rate comparison chart.

Question 2: How can I compare costs between one managed care plan and another?

You should compare not only the premium cost of the plans, but also your potential out-of-pocket costs for various services, based on the deductible, coinsurance or copayment requirements of each plan.  Consider your medical care utilization over the course of an average year.  How many doctor visits do you generally have?  Be sure to include visits to specialists.  What would those visits cost under the terms of various plans you are considering? 

Question 3: Will an HMO or EPO plan cover me if I need to use a doctor or hospital outside of New Jersey?

Coverage for services provided outside the service area of the HMO or EPO is generally limited to medical emergencies and urgent care.  Sometimes carriers allow members covered under an HMO or EPO plan to use doctors or hospitals located in another state if the doctor or hospital belongs to that carrier’s network in that other state. In addition, if there are no doctors or hospitals in the carrier’s network that can provide the care you need, you can request an “in-plan exception.”  Contact your carrier for details. 

Question 4: If I use the services of an emergency room or facility, but am not admitted, must I call the carrier to request authorization?

Yes. The individual plans require that you request authorization for emergency treatment within 48 hours after treatment, or the next business day, whichever is later, or as soon as reasonably possible. If authorization is not requested, as required, your benefits will be reduced by 50%.

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