Question

What's the difference between MCO's and CDHP's? What's your preference and why?

Answer 1

Difference between MCO's and CDHP's:

Managed Care Organization: It is an organization of medical service providers, who use variety of techniques to reduce cost, utilization and improving the quality of care health plans. They provide additional services by contracting with Medicaid agencies.

Advantages of MCO are:

1. Low cost is associated with MCO.

2. There is reduction in cost without sacrificing quality.

3. Employers who seek it for their employees saves exorbitant fees.

4. Network of Health care provides are readily available to them.

5. With their experience they provide quality services to its members.

Consumer-Driven Health Plans (CDHPs): It is a type of health coverage that enables an individual’s employer to fund the HRA or the health reimbursement account. This account will be used to pay out of pocket health care expenses. Consumer-driven plans were introduced in 2001

Advantages of CDHPs are:

These plans are usually low cost with low premium.

It also increase the number of employees to have access to the insurance

Encourage the employees to use low cost insurance system and reduce their unnecessary Healthcare expenses

Unnecessary expenses on the frequent medical visit are reduced because of less expenses on healthy employees

These plans are controlled by employees only so they are generally modified by a General opinion of the employees only

My preference:

CDHPs have changed health care service reimbursement and health insurance expectations. For reimbursements the funds available in HRA can be used to pay for pay out of pocket health care expenses, deductibles as well as co-payments. When in network providers are used then usually preventive services and diagnostic tests (appropriate as per age) are covered at no cost. In terms of health insurance expectations, participants now want to take a more active role in managing their health expenses and selecting their health care providers.