If you are having to sign up for a new employer health insurance plan or are having to get your own individual policy, you are probably looking at several different types of policies. You are most likely coming across the terms HMO and PPO. What do they mean, and to be more specific, how will choosing one of these affect your health care?
Let's look at what these are and how they work and also how each affect your out of pocket costs. To start with, both HMO and PPO plans are forms of managed care networks. Networks is the important word here because it is how each network operates that affects how you receive care and the price you pay for that care.
HMO (Health Maintenance Organization) describes a network that is a closed system. All patients are kept within the network for their care. Everything, including billing and medical records are handled within the network, which makes these things much simpler for the doctors and patients to deal with. This also keeps the prices of premiums lower and the out of pocket costs for members much lower as well.
What you will give up in return for lower prices, easier billing, and better medical record availability between doctors is choice. You have to choose a primary care physician that then determines the majority of your medical care. If you need any health care services, it must be first approved by your primary care physician, and the service must be provided within the network.
PPO (Preferred Provider Organization) describes a more open network. In one of these networks, patients have much more freedom to choose providers. If they use doctors that are in the network, they will save substantially on out of pocket costs, but they still have the option of seeing out of network health care providers and pay a higher rate. They also do not require you to have a primary doctor in order to see specialists, however, most specialist require you to have a referral anyway.
These plans usually cost more in monthly premiums and also can be more expensive when it comes to out of pocket expenses, especially if you use out of network providers, but the choice is yours. Billing and getting medical records transferred between doctors can also be more of a hassle but is not usually a big issue.
Another thing you need to have a look at when comparing HMO vs PPO networks is availability and location. PPO networks are generally widespread while HMO networks tend to be located near a central hospital. Convenience and location is something that is often overlooked, but it also takes gas and time to travel.
One of the best things you can do is to talk to a local agent before you make a serious decision. Find one that is experienced and knows the ins and outs of the local providers so that you can have a good idea of which plan would be the best for you.
Getting more information on health care choices is easy when you visit this site on HMO vs PPO
