The Differences between PPOs and HMOs

Understanding health insurance benefits can be confusing, plus we must select either an HMO or a PPO plan. Has deciding which plan is best for you left you confused and wondering which direction to go? Clarifying a few points might help in this decision process.

What do these letters mean? A Health Maintenance Organization (HMO) is a type of health insurance plan that restricts coverage to care from providers who work for or contract with a particular network. A Preferred Provider Organization (PPO) allows the patient to choose any provider they wish, whether in or outside a particular network.

How does my cost differ when using each plan? When selecting an HMO, your services are provided based on a predetermined fee. If the actual cost of services exceeds the predetermined amount, the provider must absorb the excess costs. A PPO uses cost sharing, which means when you use medical services, you pay or share part of the cost in the form of deductibles, co-payments or coinsurance.

Does one provide more flexibility than the other? When selecting an HMO, you select a primary care physician (PCP). This physician is your point person when seeking care, and they refer you to specialists within a network. A PPO allows more flexibility. Although you still have in-network providers, you may self-refer to specialists, allowing you more control and flexibility. You may also seek care out of the network and still receive some coverage benefits.

Are you wondering which options your providers accept? Do you want to discuss your unique needs to assist in your decision? We are here to help and just a phone call away.