Difference between HMO and PPO
Health insurance is undoubtedly an important concern, but the bewildering array of plans out there can make it quite a challenge to determine which one is best suited to your needs and circumstances. HMO and PPO are two of the plans that often come to the forefront when the subject is discussed, so we thought it fitting to present a comparison of the two.
Definition
An HMO or health maintenance organization is basically an insurance plan intended for health concerns. It is typically pre-paid by members, allowing them to avail of a wide array of health related services, including preventive care. While HMOs generally cover most health care concerns, they may restrict members to doctors and hospitals that are part of the particular HMO’s network. You may be able to avail of services from other doctors and providers (and be covered for it), but you will usually have to seek authorization from your HMO beforehand.A PPO for its part combines many of the features and services of HMOs and private insurance companies. Just like HMOs, PPOs will have their own network of doctors and hospitals, all of which have been pre-selected and approved by the particular PPO. Unlike HMOs however, PPOs generally allow more flexibility with regard to making your choice of hospital or physician. Of course you will usually have to pay higher rates for service providers that are not part of your PPO’s network.
Choices Of Doctors
The main difference between HMOs and PPOs is in their policies with regard to doctor and hospital selection. Most HMOs for instance will ask you to choose a doctor who will serve as your primary physician. You will be covered for emergency situations that require you to seek another doctor’s assistance of course, but in most cases, this doctor is whom you will see for the majority of your concerns.The PPO model is slightly different in that you have a pool of doctors and hospitals to choose from. These providers are all part of the network of the PPO, and they generally offer discounted rates to all members. You can then choose to see which ever doctor you like at any time. Again you will be allowed to seek consultation with doctors who do not belong to the PPO’s network, although you will have to pay a higher cost.
Membership
Current surveys show that more employees in the United States are enrolled in PPOs than in HMOs. This trend has been in place since at least 2002, when PPO membership comprised 49% of the employee workforce in the country, with 31% enrolled in HMOs.
Summary
HMO
- Less billing concerns
- Best suited for those with low out-of-pocket costs
- Ideally suited for families that require annual physicals, well-baby consultations, and OB/GYN treatment/diagnosis
PPO
- Offers more options for choosing a doctor
- Members may consult with in-network providers and even doctors not in the network
- Better suited for those with chronic health conditions
- Better suited for those who wish to explore alternative treatment options
