HMO or PPO? What’s the Difference?
Submitted by: Steve Klein
The health care system is difficult enough to navigate without having to make decisions as to what plan will best serve you and your family. There are two major segments of the health insurance market which means you must make a choice as to whether you want an HMO or a PPO. Let me take a minute to explain the differences between these two plans.
HMO stands for Health Maintenance organization. Kaiser Permanente is an example of an HMO in that you must always go to their building for service and you are only allowed to use their doctors. A better definition of the HMO is that it is an organization of healthcare providers that have contracted with an insurance carrier to offer their services at a fixed price.
A major feature in an HMO is that you must choose a primary care doctor who acts as a gatekeeper and manages all aspects of your health care. Your primary care doctor must be a member of the HMO. If you join an HMO plan and your doctor is not a member, you ill have to find a new doctor who does participate in the network. This makes the HMO more restrictive than other plans plus there are rules you need to follow should you need to see a specialist. You will need a referral from your primary care doctor before you visit a specialist or the visit will not be covered by your plan.
The biggest advantage to an HMO is the cost. HMO’s are often less expensive than other insurance plans with lower copayments and deductibles as well. This can save you, the consumer, a great deal of money on your health insurance plan. However, don’t forget that these are companies that are in business to make a profit so your HMO doctor will be seeing as many patients a day as possible in order to minimize the cost to the organization.
PPO stands for Preferred Provider Organization and these plans are much less restrictive that the HMOs. If you have a PPO you can see whatever doctor you like as long as they have a contract with your carrier. If they accept the Blue Cross or United HealthCare plan you are on, then you can visit them at will. You may also visit a specialist without having to get a referral.
While PPOs cost a little more than the HMOs, these plans are very popular because they are less restrictive. You will have more control over your healthcare decisions than you would under an HMO. Personally, I prefer the PPO for the flexibility it gives me in choosing which provider I want to see without having to take the extra step of going through a primary care doctor to do so.
Most people with decide which health plan works best for them and price is often a factor. HMOs are significantly cheaper and limit your out of pocket expenses, but you do give up the flexibility of a PPO and your choices are more limited.
Regardless of your choice, either a PPO or the HMO, one of the most important facts to remember about a health plan is that you are limiting your exposure to risk and you are getting your medical treatment and services at the carrier’s negotiated rate. Whatever you decide, it will be better than having no insurance at all. Even if you can only afford a high deductible plan, you are protecting yourself from financial ruin by putting a cap on your exposure.
Visit our web site at www.mrinsuranceofmaryland for a free quote. Call us today at 866-654-4844 and we will help you choose an affordable health plan without compromising quality. Your health is our business!
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