When considering health insurance plans, often you are faced with multiple decisions including premiums, co-pays, co-insurance, stop limits and much more. All of which can be very confusing, however, none of which are nearly as misunderstand as the infamous HMO vs. PPO mystery. In my experience, most customers seeking individual health insurance plans, or any other plan, find this the most difficult and confusing element. So I am hoping this little article can help clear things up:
5 Essential Facts: HMO & PPO Health Plans
HMO Health Insurance Plans
Fact 1
HMO stands for Health Maintenance Organization, and thus, puts an emphasis on maintaining your health by ensuring you visit the doctor on regular basis, which ultimately lowers the cost for the insurance providers.
Fact 2
HMO health plans tend to be less expensive verse its rival the PPO. This includes premiums and co-payments. Sometimes, co-payments are even free.
Fact 3
HMO plans tend to be more restrictive. Almost always, there will be a “Gatekeeper” or doctor you must see before seeing any kind of specialist.
Fact 4
Doctors, including your “Gatekeeper” or primary care physician will have to part of the HMO network. You are not allowed to go outside of the HMO network. Often this means you will have to switch doctors.
Fact 5
Often times, HMO networks tend to get overcrowded and appointments with doctors can be difficult to obtain.
PPO Health Insurance Plans
Fact 1
PPO stands for Preferred Provider Organization. As the word “preferred” would suggest, participants have more flexibility and options associated with the plan, making it preferred.
Fact 2
PPO plans as “preferred” again, would suggest, tend to be much more expensive than HMO plans. Often, PPO plans will include higher premiums higher co-payments and often co-insurance tacked on as well.
Fact 3
PPO plans offer the insured the least amount of restriction, if none at all, in picking their physician and seeing specialists. Many people prefer this due to the flexibility associated with it.
Fact 4
PPO plans still work within networks, similar to a PPO. However, PPO networks tend to me much larger than their HMO counterpart. Also, most HMO plans will allow participants to go outside of the network for a slightly increased co-payment.
Fact 5
PPO plans generally are more expensive than HMO plans. However, due to the pooling of people in a PPO network, fees associated with health care will be lower for participants. In other words, you will pay far less for services if you are in a PPO plan vs. not having insurance at all.
