What’s The Difference Between HMO and PPO Plans?
Let’s suppose you’re looking into the best health insurance plans for you and your family. Of course, you want to ensure that the plan you choose meets your needs and is budget friendly, while allowing you to see your preferred doctors or specialists. Early in the search, you realize there are several types of plan options available, but you notice that HMO (health maintenance organization) and PPO (preferred provider organization) plans are the most common. However, it’s hard to understand the difference between the two and almost seems like an impossible choice.
You’re not alone. HMOs and PPOs are distinct healthcare plans and networks, and each provides members with quality care and benefits; they also have their own pros and cons. The main differences between them usually pertain to cost, network size, ability to see specialists, and out-of-network coverage. How can each plan benefit you and your family? What’s the best choice for your situation?
Understanding The Choice Between HMO and PPO PLans
An HMO, or a Health Maintenance Organization, is based on a network of specific doctors, hospitals and other healthcare providers within a certain geographical area. Generally it only covers care that is offered by the carrier’s contracted in-network providers. Typically you have to choose a PCP, which is known as a Primary Care Physician, and get a referral before you can see a specialist or have special tests done. Because they work with a limited number of providers, they are able to negotiate pricing, which leaves you with lower cost premiums and out-of-pocket costs. However, there is almost always a deductible – which is the amount you must pay up-front before insurance benefits kick in to cover costs. Also remember, you are restricted to who you can utilize for your healthcare needs, unless it is a medical emergency. So if your current doctor is not within the network, you will have to choose a new primary physician or forgo that coverage, opting to pay for out-of-network services yourself.
A PPO, or Preferred Provider Organization, is designed to offer flexibility when choosing doctors, hospitals and other providers. They have a larger and wider network to access, and unlike HMOs, they offer you the freedom to choose to continue to utilize specific out-of-network services you may prefer. You don’t need to choose a PCP, referrals to see a specialist are not required, and you are able to utilize your coverage in a broader region, even nationally. However, while costs are more affordable to use the in-network providers, you can run into higher premiums or out-of-pocket costs in exchange for more flexibility. If you use an out-of-network doctor, you will typically have to pay your copay in full as well as cover the cost of the medical bill, and then submit a claim to your PPO for reimbursement. Overall, you will be a bit more responsible for managing or coordinating your care and needs.
Making the best decision for your family comes down to what is more valuable to you; lower costs and increased rigidity in your healthcare options, or greater flexibility in coverage and potentially higher costs. HMOs may be better for you if you don’t mind having to utilize specific doctors, but if you have a large family or are a heavy healthcare user, a PPO may be your best option. With either plan, consider checking to see if your preferred providers are already in the network and do your research to ensure you are securing the best coverage for you and your family.
If you’re unsure which type of plan to choose, it’s worth it to get in touch with Health Plan Options Today to speak about private insurance costs. Call their hotline at 888-375-8879 or click below to get more information from our team.