HMO vs PPO

Posted in Health Insurance

January 28th, 2009

Choosing a type of health insurance plan can be extremely confusing for most people. There are numerous health insurance providers, coverage levels and premium packages to consider. So if you find yourself choosing between an HMO and a PPO, knowing the difference can make things much easier for you to understand.

HMOs and PPOs are types of managed health care insurance plans available in the United States. They both require a monthly premium payment and co-payments, and both offer access to quality health care when it is needed. The doctors who participate in HMOs and PPOs are high-quality professionals who must demonstrate their excellence when applying to join the network managed by the insurance companies.

HMO stands for Health Maintenance Organization. When individuals join an HMO, they are asked to choose their primary health professional from doctors within the HMO network. Women are also asked to choose an OB/GYN at that time. HMOs require patients to go to their primary care physician before getting referrals to specialists in the system. For example, if you are fair skinned and especially concerned about skin cancer, you will need to visit your primary care physician to get a referral to an in-network dermatologist. Many times there is no deductible that needs to be met in an HMO plan. Choosing doctors outside an HMO plan is not recommended, as the insurance provider will not cover the associated costs.

PPO is the abbreviation for Preferred Provider Organization. Like HMOs, there is a network of doctors you can choose from. Unlike HMOs however, you can choose doctors both within the PPO network and outside, as the insurance provider will cover some of those expenses after your deductible is met. No referrals are needed within a PPO plan, so if you want to make an appointment with a specialist, you can do so at will.

Both HMOs and PPOs are excellent health insurance options. Many times younger people may choose HMOs as they are generally more cost effective, while older people like the flexibility of choosing their care provider on a PPO plan. Consider all your options before making any decision.