Health insurance policies usually come in two types: HMO and PPO. An HMO (health maintenance organization) plan tends to be less expensive than a PPO (preferred provider organization). HMO co-pays tend to be very low, and there are no deductibles to be met. In an HMO, a primary-care physician (PCP) is required, and all specialists must be referred by this PCP. A new type of plan called Point of Service is becoming quite popular, and combines elements of the HMO and PPO. Regardless of the type of insurance you choose, be sure to discuss all the details with your insurance provider.
A PPO plan offers greater flexibility when choosing a doctor. Unlike an HMO, which is limited to a smaller number of physicians who are contracted with the insurance provider, a PPO leaves patients with a greater number of possibilities. PPO plans also have a provider network, and these physicians often offer incentives and benefits. But they are not the only doctors that a person with a PPO plan can visit. Additionally, patients with a PPO can see any specialist they like, not only those who are referred by their primary-care physicians.
According to a 2007 article at Consumer Reports.org, 8 percent of consumers with an PPO plan complained about long wait periods for doctors and specialists, as opposed to 14 percent of HMO consumers. This may be due to the more limited number of doctors that are available to HMO patients. Larger flexibility in PPO plans allows for less waiting time for appointments.
In a PPO plan, the costs of services are always disclosed and agreed upon before service begins. Once these service costs are set, they cannot be exceeded. For example, if you had to have extensive dental fillings and were told that costs would not exceed $400, the dentist has the responsibility to charge only this amount. The percentage that you pay is fixed and cannot change.