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HMO vs. PPO: Which Is Right for You?

If the prospect of choosing a health care package sounds as enticing as getting a root canal, well, you’re not the only one. HMOs, PPOs, HDHPs, HSAs, ASFs—too many acronyms, too little time! It could leave even the biggest cash nerd screaming, “Mum!”

There’s no reason to plead for sympathy, however. We’re going to crack the distinction between HMOs and PPOs, two of the most common forms of health insurance available today. Then you can choose your plan and rest assured, trusting that you’ve made the right choice for you and your family.

How does HMO Health Insurance Plan Work?

The Health Maintenance Organization, or HMO, can only finance your treatment if delivered by physicians who work with or contracted for your particular arrangement. Visit your network doc and plan to pay for the entire shebang. Besides, the only exception to this provision is in the event of an emergency.

HMOs are also restricted to a particular geographic region and could force you to live or work within that area to be considered for insurance. With reduced premiums and lower out-of-pocket rates, they often appear to be ideally tailored to healthier individuals who do not expect the need for a lot of advanced health services during the year. When you need to see a doctor, you would first need to get a recommendation from your primary care provider (PCP).

What are PPO Health Insurance Plans?

A PPO, or Preferred Provider Organization, is usually the most common form of coverage for those obtaining care from their employer. PPOs mean that you pay very little for covered programs when you select networks in the network with your contract, as well as chosen providers. 

You can also use out-of-network providers, so you’re almost certainly going to have to pay extra (though not necessarily 100 percent like with an HMO). One of the PPO’s key selling points (in addition to a broader range of providers) is that you wouldn’t need to see a PCF to get a referral to a specialist. 

With professionals already included in the chosen provider network, you can bypass the middleman and go straight to the expert you need.

What is the difference between the HMO and the PPO?

If you ever have your head rubbed on the health care terms’ alphabet soup, take heart. Take a glance at some of the common distinction between the two types of health insurance schemes.

• HMOs have smaller costs and out-of-pocket costs but are less flexible- Lower rates and out-of-pocket costs are the biggest draws for HMOs. But the premium—the percentage you spend per month for health insurance—is cheaper in part since you have a more comprehensive number of insurers to select from, which means less flexibility in places you can visit for health care. The HMO needs you to request a referral from your PCP to an in-network expert.
• PPOs have higher prices but are more customizable- Although you can expect a high monthly PPO fee, you can also count on a broader range of suppliers and the right to consult a specialist without a recommendation from your CFP. If you see experts regularly or would like to see fewer limitations on out-of-network services, this is the strategy for you.
• HMOs have a minimal to zero annual deductible value- Another key selling point for the HMO is its minimal to no yearly deduction. This ensures that the cost you have to spend before the coverage kicks in maybe as little as no dollar.
• PPOs usually have a greater deductible, but there’s a justification for it- In the case of a PPO, the deductible (like the annual premium) is usually greater than the HMO. But Why? Ok, you pay for connections to a wider network of services and more flexibility about whom you can see and where you can meet them.
• Count on a company with an HMO– Do you have the flu and ought to see the doctor? You’re going to make payments for a company. Will you need to get your yearly physical diagnosis?   No copay will be needed.

Get The Best Health Insurance Today

At Health Insurance Plans, we guarantee that you will get the lowest healthcare marketplace Insurance rates of all time. We offer you affordable quotes that are suited to your needs. We assure you that you will gain more benefits for less. If you need to purchase a health insurance plan today, do not hesitate to call and speak to a licensed insurance agent on (866)358-2150.

References and Resources

• Humana
• Know the difference  between an HMO and PPO