Having options is a good thing. In some cases, however, it can be difficult to narrow down the options and decide which one will best suit your needs; this is especially true when it comes to health insurance.
Being that health insurance is one of the most important purchases you will ever make, it stands to reason that you want to make the best choice possible. There are several types of plans available, and the two most common include Preferred Provider Organization and Health Maintenance Organization, better known as PPO and HMO. What’s the difference between a PPO and an HMO? Which one is better? To find the answers to these questions, let’s examine each option so that you can decide which option is the best for you.
A Preferred Provider Organization – or PPO – tend to offer a lot more flexibility in terms of both healthcare providers and healthcare facilities than HMOs. For example, you’ll likely have more options in regard to the doctors you can work with and the hospitals you can visit when you have a PPO. Like HMOs, PPOs establish a network with providers; however, when it comes to seeing out-of-network providers, there aren’t as many restrictions. In other words, if a doctor that you would like to see isn’t in your PPOs network, you would be able to see him or her without having to make an appointment with your primary care provider.
Another notable benefit of a PPO is that a visit with a doctor, specialist, or a stay at a hospital that is not in your network may be covered by your health insurance; but, it’s important to note that the benefits you will receive will be better if you stay within your network.
However, while this flexibility can be beneficial, it does come at a price; generally, the premiums for a PPO health insurance policy are higher than an HMO. Additionally, PPOs often have deductibles. Therefore, the cost of a PPO policy can really add up.
With a Health Maintenance Organization (HMO) insurance plan, you will have access to several doctors and hospitals; however, they must be within your network. A network is comprised of health care providers and facilities that have agreed to reduce the rates that they charge for individuals who carry the HMO health insurance plans that they are a part of.
The benefit of an HMO is that the costs of premiums tend to be lower than the premiums that are associated with a PPO; however, on the downside, you don’t have as much flexibility. If you see a doctor or go to a hospital that is not within the network, you will be charged the full amount. Furthermore, depending on the plan that you select, you may be have to list a primary care physician, and you will have to receive approval from him or her before you can see a specialist; in other words, you would need a referral before seeing a specialist or when you need to have specific types of testing done, such as an MRI or a CT scan.
The Difference Between PPOs and HMOs
The primary benefit of a PPO is that you have more options available to you because there aren’t as many restrictions; however, the cost of your premiums will be significantly higher; plus, you will likely have a deductible. An HMO will cost you less, but you will have a lot more restrictions; for example, you may have to see your primary care physician before seeing a specialist or before having certain types of tests done. Additionally, you can only see doctors or visit hospitals within the HMO network, otherwise you will not be covered and you will have to pay the full cost.
Which Should You Choose?
So, which one should you choose: an HMO or a PPO? It really depends on your specific needs. For example, if you don’t want to be limited to seeing only the healthcare providers and going to the hospitals that are within your network, a PPO may be a better choice for you; therefore, if you have certain health conditions or you are genetically predisposed to certain health conditions, you may want to select a PPO. But, if you want to keep the costs as low as possible, an HMO will likely be a better option.
To determine whether you should choose a PPO or an HMO, consider your specific needs and the features of each type of policy, as well as the health care providers and the medical facilities that are within your area and work with each type of policy. Based on your specific needs, you will be able to decide whether a Preferred Provider Organization (PPO) or a Health Maintenance Organization (HMO) is a better choice for you.