When it comes to health insurance plans, you’ve probably heard a lot of acronyms get thrown around – the 2 most common being HMO and PPO. Some people prefer an HMO and others prefer a PPO plan, but do you know the difference? First there’s the Health Maintenance Organization (HMO) which gives you access to certain doctors and hospitals within “the network”. The other option, is the Preferred Provider Organization (PPO) which also features a network of providers but contains fewer restrictions on seeing non-network providers. While everyone loves choices in life, sometimes those choices can be more difficult and choosing your type of health insurance is not a decision you should take lightly.
HMO plans cover you only when visiting doctors within the predetermined provider care network – there are limited opportunities to see non-network providers but these remain restricted. With some HMOs you may be required to select a Primary Care Physician (PCP), who will determine what treatment you need. It’s possible that you may need a PCP referral in order to be covered when you see a specialist of any kind or need special tests performed. Unfortunately, if you opt to see a doctor outside of your HMO network, you’re most likely not covered, meaning you will be required to pay out of pocket for your services – which can quickly get expensive. The plus to HMO plans is they usually have a lower premium and have a low or zero deductible.
PPO plans, often seen as the better option for individuals that need flexibility, provide a greater coverage than the HMO. With a PPO, you’re able to see a doctor or specialist you like without seeing a PCP beforehand. While the PPO contains a network, it also is likely to cover you at doctors or hospitals outside of the network – however your benefits will be greater if you stay within network. Though premiums tend to be higher and deductibles are common, the PPO program allows flexibility many patients need.
When making a decision about which plan you should select, consider your medical needs and those of your family if you need coverage for them as well. You’ll also need to research the availability of HMOs in your area and have an in-depth look at the network to determine if the choices of doctors and medical facilities are enough to meet your needs. If you have a lower income and limited medical needs, an HMO may be the best bet for you. However, if you have multiple specialist needs and a higher income, the PPO is more flexible and may be the better option.
When it really comes down to it, choosing a plan should be individually researched and based on your personal needs. If you’re the type of person who goes to the doctor once a year for a physical and not much else, the HMO may be a more affordable option for your limited needs. But if you’re someone who sees a specialist for different conditions or has a family history with multiple possible health problems, the PPO would allow you the flexibility to see the doctors you want and cut out the PCP middleman. It’s also important for you to look into each plan’s drug coverage – especially if you require multiple prescriptions.
These days, the previously well-defined differences between HMO and PPO plans are beginning to blur as more HMOs allow out of network benefits which makes the choice harder for individuals. What it all comes down to though, are your personal needs. Assess your personal care needs and compare and contrast the plans based on that information and your choice will become clear.
At the McCormick Agency, we can assess your situation and make sure that you have the best plan for your needs. Our website is www.mccormickhealth.com and our services are free!