How to Choose between an HMO or PPO Insurance Plan

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By norcalmom88
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Choose between an HMO or PPO Insurance Plan

If you are struggling with the decision of whether to choose an HMO or PPO insurance plan, you should probably take a closer look at the different features of each type of plan so that you can make an informed decision.

Difficulty: Moderately Easy

Instructions

Step 1

First of all, you need to understand the difference between the two types of plans. HMO stands for Health Maintenance Organization, an HMO plan includes having to choose an assigned primary care physician, your primary care physician is also going to be affiliated with a particular medical group (professional group of doctors). You will have to go to your primary care physician for almost all of your medical needs/problems. Even if you want to see a specialist,it would need to be a specialist within your assigned medical group and your primary care physician would need to put in a referral to that medical group where they would either approve or deny the request. PPO stands for Preferred Provider Organization, and with this type of plan, you are not assigned a primary physician and can go to whichever doctor you would like. Even for a specialist visit, you don't need a referral, you can just make the appointment and go.
Step 2

The next thing to think about is of course MONEY. Normally, HMO plans are much more inexpensive than a PPO plan because there is usually no deductible with an HMO and the co-payments are generally flat dollar whereas with a PPO plan it is common to have percentage co-payments (such as 30% of the insurance company's usual and customary rate). PPO plans will also usually have a deductible, ranging anywhere from $100 to $5,000, which means that you have to pay for your medical services until you have paid up to the amount of your deductible and then your insurance company will start paying your claims. PPO plans also allow you to go outside of the insurance company's preferred network and see a non-preferred doctor at a higher out of pocket cost. HMO plans limit the access to any doctor and you normally have to stay within your assigned medical group or your claim will not be paid.
Step 3

In the end, it all depends on what works best for you and your family. If you like being able to have the freedom of seeing whichever doctor you choose without having someone else approve it first, then a PPO may be the right choice for you. If lower out of pocket costs appeal to you then it's probably best to choose an HMO to avoid any surprise bills. Whichever you choose, there are most likely always going to be things that you don't like about your health insurance, but with healthcare costs rising every day it's important to be informed on what plan your choosing and the way that it can benefit you.