While both HMO and PPO plans provide insurance services, they have differences in costs, flexibility, and the network of care practitioners. An HMO offers a limited range of healthcare providers and requires that a primary care physician approve any referrals to specialists.
Flexibility characterizes Preferred Provider Organization (PPO) plans. Such plans have a relatively broader network that includes even out-of-network medical providers, although services offered by these providers are paid at a higher percentage which gives the healthcare consumer more freedom in accessing various medical services at different times.
Cost
Compared to PPO plans, HMO plans place lesser premiums and most often no deductibles are required to be paid. This occurs because HMO providers are willing to accept a lower reimbursement rate to gain access to a higher volume of patients; this makes HMOs cost effective not only for the health insuring company but also for the members of the plan.
When covered by an HMO plan, use of medical services provided is only guaranteed when health care practitioners who form its network are utilized. A primary care doctor’s referral is most likely required when trying to see specialists who are outside the network, if such specialists exist at all. HMOs also impose more stringent limitations when it comes to coverage for tests and medications – though preventive health services as mandated by Affordable Care Act may still apply.
Higher premiums are associated with longer wait times for a PPO, even though the flexibility it provides makes it easier to visit facilities inside and outside the network. The freedom to opt for out-of-network providers, especially at the emergency level, does come at the expense of higher costs with coinsurance and deductibles.
It is clear a tradeoff exists between ease of access and affordability. If spending less while receiving a limited choice of providers is important to you, then an HMO plan may be better suited to your needs.
PPO offer the greatest flexibility in choosing providers, as a vast majority participate. Contracted doctors and facilities offer lower prices within the PPO network for a multitude of services; however, if these are obtained outside of the network, you could pay significantly more out of pocket or worse, not receive any insurance coverage at all.
While PPO’s offer the most customizability, they also come with the highest premiums out of all the plans, especially for those who are not paying a deductible. In conjunction, PPO’s also have higher premiums than HMO’s with out-of-pocket expenses and copayments.
Your decision of whether to choose an HMO or a PPO plan will depend on how you wish to spend your money in terms of cost and flexibility. An HMO may suit your needs better if lower costs are more important than having more choice amongst healthcare providers. On the other hand, PPO plans permit unrestricted access to any physician or provider within their network at anytime.
Accessibility
Typically, HMOs insurances will only pay for care rendered by providers in their network, referred to as in-network doctors. These providers have contracted to provide services at reduced rates for plan members and must meet certain quality standards. Receiving treatment from out of the network physicians usually means higher out-of-pocket expenses, other than in emergencies. Most HMO plans also require members to designate a primary care physician who will coordinate your health needs and refer you to specialists when necessary.
PPOs offer patients greater latitude in the selection of their health care providers as they have larger networks than HMOs and the option to see specialists without a referral from a primary care doctor. They do, however, come with higher monthly premiums, copays, deductibles and out-of-pocket expenses when compared to HMOs.
HSBMs and PPOs depend entirely on which you prioritize more. An HMO may be ideal for you if cost savings is of concern. If you possess higer level health care needs, then a PPO may be ideal. Remember when making these plans to give them a ghood amount of thought as you are unsure whether or not you will be happy with your decision.
Choice
Affordable monthly premiums are usually a norm with HMO plans, and with general services, there may or may not be out of pocket expenses that require a deductible to be paid. Care is managed first with a primary care doctor who makes referrals to specialists within the referring providers network. Most economic choice with unrestricted access to general services means a PPO plan. Numerous providers are available and patients can visit out of network specialists. With HMO plans, there is a greater level of care, but it will come at a much higher price as PPO plans incur larger monthly payments with possible payment of a deductible or coinsurance.
The HMO or PPO that suit your needs best will depend on your priorities. If you are looking to save money and keep your current specialists, then an HMO may work for you, if you require more flexibility withs witching doctors, then PPPOs would work better.
The HMO and PPO models have a network of hospitals, physicians, and other healthcare professionals who, for a set fee, agree to provide services at lower rates. If one of the doctors in the network is used, the majority of the medical expenses will be paid by the health care insurer, and the only payment required is the deductible or coinsurance payment. Generally, out-of-network care coverage is restricted within normal circumstances and only applies in emergencies or when no suitable in-network provider is available.
