How to Pick Between HMO and PPO Health Coverage

Choosing the proper health insurance for you and your family can be a daunting task. Deciding whether to go with an HMO or PPO plan can be pretty difficult if you don't know the difference between the two. Of course, with each insurance company, there are different rules and costs, but understanding some of the basics is essential before signing up for health coverage.

Difficulty: Moderate

Instructions

1. Before you choose between an HMO or a PPO, first find out if your employer offers health insurance. It's a great idea to see the percentage they cover and what your health insurance premium will be if there is one. If it's cheaper to buy your own health insurance, you may want to take this route.

2. HMO stands for Health Maintenance Organization. Think of an HMO as a health plan you pay for in advance. You will receive a primary care provider through your network. If you should need to see a specialist like an ENT doctor, you will need a referral from your PCP.

3. PPO stands for Preferred Provider Organization. A PPO gives you more freedom in that you don't have to see doctors or specialists within your network. PPO members usually pay for their health services and are reimbursed later by the PPO sponsor.

4. HMOs tend to charge low rates for office visits and co-pay's. Premiums aren't as steep as for other healthcare plans.

5. PPOs also require co-payments when you visit a doctor, but if you visit an out-of-network specialist or doctor, you will inevitably pay more out of your own pocket.

6. HMOs don't often enforce a deductible. Though, you may find you have to follow more rules such as which doctors you see and how often you may see them.

Tips & Warnings

• If you have a life-threatening illness or chronic disorder, a PPO may be your best bet.
• If you don't want many billing issues, an HMO is your best bet.
• Always speak with your health insurance provider for further detail and restrictions.