Having a healthcare plan is an essential part of keeping yourself or your family safe. When it comes to choosing between a Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO) insurance plan, however, many people don’t know which to take.
There are advantages and disadvantages to both plans. Depending on your personal needs, one might be more suited for you and your family than others. Below, we’re going to look at the pros and cons of each.
Both PPOs and HMOs work with medical networks, from which you can select healthcare providers with which you’d like to work. However, these networks aren’t the same for both.
PPOs usually have a broader network of medical providers, hospitals, and doctors. In comparison, an HMO works with a much smaller network, often based in a specific region. No matter which insurance plan you choose, you’ll have to work within those networks.
That said, there is a key difference between a PPO and an HMO. With an HMO, you must have a referral from your Primary Care Physician, or PCP, before you can get any care. On the other hand, with a PPO plan, you don’t need one before you can seek medical attention.
Another perk of a PPO plan is that you can elect to get treatment outside of the network, although it will carry an additional cost. With an HMO, you can only get medical care outside of the network if it’s an emergency – and you’ll have to pay all the related bills yourself.
Primary Care Physicians Required
If you get an HMO insurance plan, you’ll need to pick a Primary Care Physician from the approved network. Choose carefully because this doctor will oversee all your healthcare decisions.
For example, before you can see any doctor, you’ll need a referral from your PCP. That applies to routine care as well. The only exception to that rule is when you need emergency care.
However, certain benefits come with having a PCP. Having a long-term physician means that your doctor will be familiar with you and your medical history. It’s a far more personal system that generally allows for far better patient-focused healthcare.
More Affordable Healthcare
When it comes to health insurance plan premiums, PPOs are typically more expensive than HMOs. Whether you’re single or getting insurance for your family, HMO insurance premiums remain the more affordable option.
One of the reasons for the price difference is that HMOs negotiate lower prices with the medical providers in their network. As a result, you pay a lower monthly fee, and you also have lower out-of-pocket costs and co-pays.
On the other hand, with PPOs, you’re paying for a larger network of healthcare providers and a bit more freedom in making your medical care choices. As a result, your fee is also higher. There are other costs involved, as well.
For one, there’s no way to determine your out-of-pocket costs, as they’ll vary significantly between different PPO plans. Copays and coinsurance payments are also quite common, and getting treatment out-of-network can be considerably more expensive.
Finally, your PPO might not pay for your treatments and medical bills directly, depending on your plan. You’ll have to pay the bills yourself, submit a claim to your PPO, and hope they reimburse you. An HMO typically pays any bills from in-network medical providers directly.
Keep Your Future Needs in Mind
Knowing the differences between HMOs and PPOs are not enough to make an informed decision. Instead, you need to consider your future needs as well as your current ones. For example, a lower premium might look more attractive right now, but you might value more flexibility in the future.
Request information from different healthcare providers and review the documents carefully. Ensure there are medical care services covered in your region, consider the need for specialists, and study each plan’s advantages and limitations.
Choosing a healthcare plan is important, but it’s not always the easiest thing to do. When you don’t understand the different kinds of health plans available, it’s even harder. Before you choose a plan or a provider, you need to decide what you need and what would work for you and your family the best.
For one, you need to consider how much freedom you’d like or need. Would having a Primary Care Physician be a benefit or a hindrance? Which plan is more affordable? Does the network cover medical providers in your geographical area?
These are all things you need to think about before making your decision. However, once you’ve considered your options, you’ll rest much easier knowing that your health is taken care o