Choosing between an HMO or PPO plan can be confusing due to the differences between the two.
Deciding which best suits your needs will be based of a variety of factors to get the best affordable health insurance you can.
Compare Both Plans
Take a look below at the basic differences between these two types of plans so you can get a better idea of which one makes the most sense for you or your family’s needs.
HMO – Health Maintenance Organization
A Health Maintenance Organization, more commonly known as an HMO, is made up of a group of hospitals and doctors who have agreed to provide health care services to people at some fixed price.
What You Get
Basically a health maintenance organization offers prepaid health plans and as a member of the group you are required to pay a premium every month.
What the consumer gets is comprehensive health care which will include hospital stays, doctor visits, emergency care, lab tests, therapy, surgery and x-rays.
The care is arranged for by the HMO through the group practice and uses the hospitals and doctors that are under contract with the organization.
One disadvantage to using an HMO is the limited choice in hospitals and doctors. In an emergency situation, however, exceptions made be made when it is shown that there is a medical necessity.
In many cases there is a copayment required that typically runs about $5 for a visit to a doctor and $25 for treatment at a hospital emergency room.
Regular insurance that requires the insured to pay a fee for each service will be more expensive and much less predictable than an HMO.
Since this program is based on fixed fees for medical care, the HMO provider is interested in making sure that people receive basic care before a problem becomes serious and more expensive to cure.
It is for this reason that HMOs usually provide coverage for preventive care including annual physicals, mammograms, immunizations, office visits and well-baby checkups.
Services covered will vary from HMO to HMO, so it will be important to compare plan features before a final decision is made.
PPO – Preferred Provider Organization
A Preferred Provider Organization is also known as a PPO and it has its own unique characteristics. The contractual relationships created by this type of organization are with various insurance companies instead of the health care providers directly.
A PPO is less organized than an HMO and therefore, not as restrictive in its coverage.
Similar to an HMO, with a Preferred Provider Organization there is a limit to the choices of hospitals and doctors that participate but the program is a combination of an HMO and a pay per service arrangement.
When the preferred provider, sometimes called a network provider, is used, the majority of the bills will be covered by the PPO.
In most situations, a small co-payment is charged for the visit but with some services there is a deductible and coinsurance that will be due.
The consumer will have their health care monitored by the primary care doctor and be eligible for coverage of most preventive care procedures.
Coverage Outside The Plan
With a PPO, it is possible to still receive coverage even if a doctor outside the plan is used, but it will be more expensive because the consumer will be responsible for paying a bigger percentage of the bill.
This is an attractive option for people who want to get involved with a PPO but do not want to have to find a new doctor.
Make The Choice
After you have done enough research in both of these options you will be in better shape to finally get the best medical insurance for your needs.