No one ever wants to be treated like a second class citizen or told that they can’t get get something they really need. As Americans we are used to getting what we want or figuring out how to get things done. unfortunately if you have the wrong insurance you will be stuck with it for an entire year.
It’s good to have choices. When it comes to health insurance, you have your choice of several plan types. Two popular types you’ll frequently see are HMO and PPO.
Differences between HMO (Health Maintenance Organization) and PPO (Preferred Provider Organization) plans include network size, ability to see specialists, costs, and out-of-network coverage.
HMO Health Insurance Plans
An HMO gives you access to certain doctors and hospitals within its network. A network is made up of providers that have agreed to lower their rates for plan members and also meet quality standards. But unlike PPO plans, care under an HMO plan is covered only if you see a provider within that HMO’s network. There are few opportunities to see a non-network provider. There are also typically more restrictions for coverage than other plans, such as allowing only a certain number of visits, tests or treatments.
PPO Health Insurance Plans
PPO plans provide more flexibility when picking a doctor or hospital. They also feature a network of providers, but there are fewer restrictions on seeing non-network providers. In addition, your PPO insurance will pay if you see a non-network provider, although it may be at a lower rate.
Here are some key features:
- You can see the doctor or specialist you’d like without having to see a PCP first.
- You have access to much larger networks of doctors, facilities and hospitals In-network.
- You can see a doctor or go to a 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 to have a lower deductible and out-of-pocket max.
| Question | Health maintenance organization (HMO) | Preferred provider organization (PPO) |
|---|---|---|
| How much will this plan cost? | Lower cost HMO plans typically have lower monthly premiums. You can also expect to pay more out of pocket. | Higher cost PPOs tend to have higher monthly premiums in exchange for the flexibility to use providers both in and out of network without a referral. Out-of-pocket medical costs are typically lower with a PPO plan. |
| Do I have to use a primary care physician (PCP)? | Yes With most HMO plans, all of your healthcare services are coordinated by your designated PCP. | No PPO plans do not require referrals for any services. |
| Do I have to get referrals to use another doctor? | Yes With an HMO, you must first schedule an appointment with your PCP and he or she will provide a referral to an in-network specialist. | No PPO plans do not require referrals for any services. |
| If I have a doctor or a specialist who is out of network, will I still be able to see him or her and have the costs covered? | No HMOs don’t offer coverage for care from out-of-network healthcare providers. The only exception is for true medical emergencies. | Yes With a PPO, you have the flexibility to visit providers outside of your network. However, visiting an out-of-network provider will include a higher fee and a separate deductible. |
| Will I need to file claims? | No Since HMOs only allow you to visit in-network providers, it’s likely you’ll never have to file a claim. This is because your insurance company pays the provider directly. | Yes In some cases, you will have to pay a doctor for services directly and then file a claim to get reimbursed. This is most common when you seek services from out-of-network providers. |