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Choosing Between an HMO and a PPO

Buying a health care plan, whether it is the first time or the fifth, is difficult. There are so many options out there and it can be difficult to know if you are making the right choices for your needs. For the needs of most families and individuals, the options come down to choosing between an HMO and a PPO plan, but what exactly does that mean?

What are HMO and PPO Plans?

HMO, or Health Maintenance Organization plan, is when you choose your primary care physician from within the specified network of doctors. HMO plans give you access to only certain hospitals and doctors that have agreed to lower rates for the insurance company and their members on the plan. While this often sounds pretty great, often an HMO will not cover any out-of-network care unless it is a true emergency. With HMO plans, you need to keep in mind that there may be a number of restrictions such as how many visits or tests will be covered. Furthermore, you will need a referral from your primary care physician to visit specialists, but the trade off is that you face lower out of pocket costs for the plan.

Alternatively, a PPO, or Preferred Provider Organization plan means that you will still have access to a network of doctors covered by the plan, but you can still visit any other doctor or specialist that is within the network without a referral from your primary care physician. The trade off here is that you will have an annual deductible that you will need to meet before you get full coverage, and many services will still have a co-pay. In essence, this means the plan is more expensive, but it allows more freedom.

Choosing the Plan Right For You?

There are benefits and disadvantages with both plans, but you will want to choose the one that most fits your needs. Because of the lower cost and more restrictive nature of an HMO plan, it is often better to choose it for preventative care as it is also the less costly option. However, if you are chronically sick and may need a variety of treatments every year, choosing a PPO may mean better treatment at a higher expense.

If you’d like to learn more about health care insurance and the intricacies that go with much of the process, contact us today.