Health Insurance

To better understand the advantages and disadvantages of HMO vs PPO health insurance plan, we will take a look at the two types of networks so that you can get a much clearer view of how each of these plans work. Then we will take a look at the dollars and sense aspects of each of these two types of plans to evaluate which type would make the most sense to have when you put in to consideration the final factor: Your own personal situation.
HMO vs PPO fact: Both of HMO and PPO plans are types of networks. HMO stands for Health Maintenance Organization and PPO stands for Preferred Provider Organization. Basically, they are managed care networks initially designed to control health care costs.
HMO (Health Maintenance Organization) Networks
How do HMO networks work? If you have a health insurance plan that is administered by a health maintenance organization, then the doctors and hospitals that accept your plan are all a part of the same network of providers. Many times this consists of a central hospital, outpatient surgery and diagnostic centers, specialists affiliated with the hospital, and general practitioners, such as pediatricians and gynecologist doctors.
You will have to choose a primary care provider that in many ways serves as a gatekeeper for the HMO. It is through your primary care physician that you will be able to get referrals to specialists.
So what are some advantages of HMO networks?
Knowing what you will have to pay for services: HMO networks usually are affordable since there is a normal charge for each type of service and billing is in most cases handled in house. This makes it much easier to plan and budget for any medical services you may need ahead of time.
Level of Benefits: In most cases, the level of benefits, what services are covered, and lower out of pocket costs for members are an advantage of these health insurance plans.
What are some disadvantages of HMO networks?
One disadvantage is having to Choose a Primary Care Provider: This can be a hard decision because the doctor you will think of considering will be the primary gatekeeper to your medical care. It is more difficult to switch doctors and to get second opinions.
PPO (Preferred Provider Organization) Networks
How do PPO networks work? If you have a health insurance plan that is administered by a Preferred Provider Network, then you can choose any provider within or outside of the network. If you choose to use a doctor that is outside of the network, your coverage for that service is reduced so that it will cost you more out of pocket, but the choice is yours.
In most cases, you can choose to have services provided by any provider without referral, (although many specialist will not see you without a referral) but this gives you many more options as you are not locked in to receiving your care through one doctor.
What are some advantages of PPO networks?
Choice: You have a greater deal of choice as to which providers you use, as to which types of services you wish to have done, and it is much easier to switch doctors and to get second opinions.
Availability: PPO networks are widespread and include a very large portion of all providers across the U.S. and include providers in rural areas.
What are some disadvantages of PPO networks?
Variation of out of pocket cost. Many providers negotiate the reduced costs for the services they provide so the same service may cost you two different prices between two providers, so if you have one of these plans, it is smart to shop around.
HMO vs PPO: Including Your Personal Situation into the Decision
After having all of this info to digest, you have to take into consideration you own personal situation. Do you live in an area that has easy access to an HMO? Do you value a centralized medical approach or do you value choice? Do you like to know beforehand what your out of pocket cost will be or would you rather be able to search for a lower cost provider?
HMO vs PPO fact: Both of HMO and PPO plans are types of networks. HMO stands for Health Maintenance Organization and PPO stands for Preferred Provider Organization. Basically, they are managed care networks initially designed to control health care costs.
HMO (Health Maintenance Organization) Networks
How do HMO networks work? If you have a health insurance plan that is administered by a health maintenance organization, then the doctors and hospitals that accept your plan are all a part of the same network of providers. Many times this consists of a central hospital, outpatient surgery and diagnostic centers, specialists affiliated with the hospital, and general practitioners, such as pediatricians and gynecologist doctors.
You will have to choose a primary care provider that in many ways serves as a gatekeeper for the HMO. It is through your primary care physician that you will be able to get referrals to specialists.
So what are some advantages of HMO networks?
Knowing what you will have to pay for services: HMO networks usually are affordable since there is a normal charge for each type of service and billing is in most cases handled in house. This makes it much easier to plan and budget for any medical services you may need ahead of time.
Level of Benefits: In most cases, the level of benefits, what services are covered, and lower out of pocket costs for members are an advantage of these health insurance plans.
What are some disadvantages of HMO networks?
One disadvantage is having to Choose a Primary Care Provider: This can be a hard decision because the doctor you will think of considering will be the primary gatekeeper to your medical care. It is more difficult to switch doctors and to get second opinions.
PPO (Preferred Provider Organization) Networks
How do PPO networks work? If you have a health insurance plan that is administered by a Preferred Provider Network, then you can choose any provider within or outside of the network. If you choose to use a doctor that is outside of the network, your coverage for that service is reduced so that it will cost you more out of pocket, but the choice is yours.
In most cases, you can choose to have services provided by any provider without referral, (although many specialist will not see you without a referral) but this gives you many more options as you are not locked in to receiving your care through one doctor.
What are some advantages of PPO networks?
Choice: You have a greater deal of choice as to which providers you use, as to which types of services you wish to have done, and it is much easier to switch doctors and to get second opinions.
Availability: PPO networks are widespread and include a very large portion of all providers across the U.S. and include providers in rural areas.
What are some disadvantages of PPO networks?
Variation of out of pocket cost. Many providers negotiate the reduced costs for the services they provide so the same service may cost you two different prices between two providers, so if you have one of these plans, it is smart to shop around.
HMO vs PPO: Including Your Personal Situation into the Decision
After having all of this info to digest, you have to take into consideration you own personal situation. Do you live in an area that has easy access to an HMO? Do you value a centralized medical approach or do you value choice? Do you like to know beforehand what your out of pocket cost will be or would you rather be able to search for a lower cost provider?