HMO vs PPO, what is the difference? How do I know which one is right for me? If you’ve asked yourself these questions—you are not alone. When hunting for the right health insurance coverage, you need to understand the difference between these two networks options.
HMO stands for Health Maintenance Organization. The HMO network contains a small network of doctors and hospitals and requires referrals from your primary care physician when seeking health services from a specialist.
Health care providers must meet specific qualifications to be eligible to participate in the HMO network. The cost for their services are negotiated and established by the health insurance carriers. Each carrier’s HMO network brings health care providers potential patients and the provider in turn charges less for their services. This controlled network allows carriers to charge you lower premiums on health insurance plans.
PPO stands for Preferred Provider Organization. A PPO is typically a larger network that does not require referrals to visit specialists.
A PPO allows you to choose which hospitals or doctors you want to handle your health care needs. Compared to the HMO, the PPO network is more flexible and gives you more freedom of choice. Unlike the HMOs, this insurance plan will allow you to visit doctors and hospitals outside their network, but having flexibility can come at a cost.
Access to Providers
If electing an HMO, you need to designate a primary care physician (PCP). Your PCP will be responsible for coordinating your healthcare services so it’s important to find one you can trust. If you don’t like the choice you made don’t worry. You can designate a different PCP every day. There’s no limitations on changing your mind. This not an issue with the PPO. You can visit any specialist of your choosing without consulting a PCP first.
Visiting Specialists
Traveling Out-of-State
If you travel often, Most PPOs will allow you to see a healthcare provider in another state. So if you fear that you’d fall sick when far away from home then the PPO plan will work well for you. A HMO plan will limit you to your home area and even if it allows for emergency health care benefits in other states, you will need the consent of your PCP first.
Out-of-Network Services
PPOs and HMOs are networks. There are several health insurance plan options within each network. And within each plan a set deductible amount. There is an unlimited deductible when receiving out-of-network services meaning there is no cap on your expenses. For this reason, it is recommended you always remain In-Network.
If you prefer to choose from a number of specialists without needing a referral, then the PPO is your best bet.
If you are okay with paying more to have freedom and flexibility in choosing which doctors or hospitals to visit when the need arises—go with PPO.
The HMO plan is a good deal if you are comfortable with a given hospital system or a certain doctor. All you need to do is enroll into a health insurance plan that your desired PCP is participating in.
If you want all your health care needs handled by a single doctor or hospital, then the HMO network is ideal for you.
Determining which one is better depends on your individual health care needs. Think first of what you have preferred in the past for means of accessing healthcare.
Need help finding the right plan for you? Or simply have further questions? Give us a call so that a licensed agent can help you with your questions and concerns. Call us at (855)-563-6993 or have us call you.