Generally speaking, the difference between HMO and PPO includes the size of the plan network, ability to see specialists, plan costs, and coverage out-of-network.
HMO - Health Maintenance Organization
In a strict HMO you have access to a specific range of doctors and hospitals within its network. A network is made up of medical providers who have agreed to lower their rates for plan members and also meet specific quality standards. You are not permitted to see a provider out-of-network and still be covered under the plan.
Some other key points about HMOs:
- you may be required to select a primary care physician (PCP), who will oversee what treatment you need.
- you may need a PCP referral to be covered when you see a specialist or have a special test done.
- If you opt to see a doctor outside of an HMO network, there is no coverage, meaning you will have to pay the entire cost of medical services.
- Premiums are generally lower for HMO plans, and there is usually no deductible or a low one.
Some HMO companies do not require you to select a PCP or have a referral to see a specialist. These are known as “open access HMO’s.”
PPO - Preferred Provider Organization
PPO plans provide more flexibility when selecting medical care. You will still have a network of preferred doctors and hospitals, but there are less restrictions. You may also see out-of-network providers, but will likely have to pay more for going outside the range of preferred doctors.
Here are some key features:
- You can go to the doctor or specialist you’d like without having to see a PCP first.
- You can go to a doctor or hospital outside the network and you may be covered. However, your benefits will be better if you stay in the PPO network.
- Premiums tend to be higher, and it’s common for there to be a deductible.
A HMO health plan is usually more affordable, but you will usually have less coverage and more restrictions. A PPO style plan provides more freedom than an HMO, but the cost of that freedom is passed to the consumer, which is you. Consider your medical needs when choosing between the two style plans. What are your needs? Do you go to the doctor often? Do you travel?
If you have questions or are confused about which company is best for you, book a meeting with an agent. The goal is to lower your potential cost as low as possible while still receiving great medical care when you need it.
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