Hints for Mothers: Pros and Cons of HMO and PPO Health Plans

Are you looking for the right insurance plan for your family? If so, one of the first things you should do is to compare an HMO and a PPO. Each of these is a distinct health insurance plan and network. While they both offer high-quality healthcare services, they also both have their own pros and cons. Before choosing a health plan for you and your family, be sure that you know the differences.

PPOs Provide More Healthcare Freedom

A PPO or Preferred Provider Organization usually offers a broader network of medical providers, hospitals, and physicians. If you choose a PPO, you don’t have to have a referral from your general care practitioner before you seek most types of medical care. You can also choose to treat using an out-of-network physician for an extra fee.

The majority of HMOs or Health Maintenance Organizations will have a much smaller physician network that is contained within a specific geographic area. If you choose an HMO, you will usually have to seek treatment within the established network, unless, of course, you require some type of emergency care. If you choose to treat out-of-network, you will likely be responsible for covering all the associated costs.

You Must have a PCP (Primary Care Physician) with an HMO

A PCP is responsible for overseeing and guiding your healthcare decisions. Usually, if you have an HMO, you have to designate an in-network PCP. It is necessary for you to go to your PCP before you are treated by another doctor unless you require emergency care.

However, there are several benefits offered by PCP care. By having ongoing contact with one physician, they will know you, your medical history, and your health goals. This level of familiarity may lead to a higher quality of medical care with a more patient-centric focus.

Receive More Affordable Healthcare with an HMO

Since an HMO is only going to cover in-network medical treatment and because these organizations will negotiate more affordable prices within the provider networks, the costs are usually lower. This will include both premiums (which is the monthly fee paid for coverage) and the out-of-pocket costs, including co-pays (which are a fee paid at each appointment). There are some HMOs that don’t have a deductible, which is the total amount of money that must be paid to receive medical treatment before the insurance company kicks in and pays some of the bills.

With a PPO, the coverage is more expensive. In an exchange for the bigger network of doctors and the higher level of freedom offered, most members will pay a monthly premium that is higher. The out-of-pockets will vary drastically based on your plan and the healthcare choices that you make. For example:

•       Most PPOs will have a higher deductible than the HMO
•       Co-insurance and co-pays are common with a PPO
•       The out-of-network treatment is usually more costly than with in-network care
•       The cost for out-of-network treatment may not be counted toward the deductible you have to pay

As healthcare costs continue to go up, the PPOs are becoming less appealing to consumers and employers and more people are choosing another option. Based on your plan, you may have to cover your medical costs and then submit a claim to be reimbursed with the PPO. With the HMO, the plan will usually cover your in-network physicians and your medical providers directly.

Making a Decision

The healthcare industry is always changing. While there may be distinct differences in PPOs and HMOs, the lines have become a bit blurred. There are some PPOs that don’t offer very many out-of-network options and there are some HMOs that now cover some types of out-of-network care. However, before you choose between the PPO or the HMO, you need to review the documents, assess the costs, the quality of the plan, and the overall scope of the coverage.

By considering the information here, you will be in the best position possible to make the right decision regarding which health insurance plan is right for you. Don’t try to make this decision without first considering the options carefully, as this will help ensure the desire results are achieved.