PPO vs HMO Health Insurance Comparison
Choosing the right health plan can be a bit more confusing than one might wonder. Especially when you have the option to choose among two good managed care health plans in the form of PPO and HMO. These two have been at the forefront of managed care plans and are your best shot at getting good health insurance.
However, in this PPO vs HMO confusion, which one should you opt for and why? To get to the crux of the PPO vs HMO discussion, let us start with understanding each managed care plan.
What is PPO?
PPO or Preferred Provider Organization is a health plan, that offers you a network of healthcare providers. As a member, you get access to a large network when it comes to healthcare-related services and providers.
Unlike some of the other plans, a PPO does not restrict its members to opt for only in-network services. You can opt for out of the network services at a slightly higher cost. Also, there is no need to designate a primary care physician in a PPO.
As a member, you can interact with a provider directly and schedule an appointment without any sort of referrals.
PPO usually offers health plans with better benefits and an affordable price tag. Thereby allowing members to opt for better healthcare services.
What is HMO?
HMO or Health Maintenance Organization is a managed care health plan, that offers you a network of local physicians and hospitals to choose from. The plan usually comes at a lower price tag, and the negotiation for the same is carried out by the insurance company.
As a member, you get to choose a single physician from a list of providers. A Primary Care Physician, who is also known as the gatekeeper, must refer a member for them to avail of services of a cardiologist, rheumatologist, or obstetrician.
The services and benefits on offer with an HMO largely depend on the health plan and the insurance company. Some common coverage includes X-rays, laboratory tests, screening for cancer, health screenings, scans, or prescribed medications.
6 Major Differences Between PPO vs HMO
Major differences between PPO and HMO Health Insurance are as follows:
- Affordability
- Networks
- Services on Offer
- Claims
- Referrals
- Pharmacy
To help you with the differences between PPO health plan vs HMO, we have divided them into the following categories.
1. Affordability
While the PPO offers the flexibility to choose from a network of physicians and providers, it does come at a cost. HMO plans usually warrant a lower premium as compared to PPO plans.
2. Networks
In the context of a PPO health plan vs HMO, a network is a group of providers that offer their services to members of the plans at discounted prices. A network usually consists of general physicians, chiropractors, and dermatologists. Members of HMO must visit their PCP first. If he/she is unable to provide adequate care, he/she will refer you to a specialist. As long as you stay within the network, you can expect good comprehensive coverage. However, all of that vanishes the moment you go out of network. But a PPO allows you to visit any physician or provider in the network without the need for any referrals. At the same time, you can also visit physicians and providers outside the network.
3. Services on Offer
The services that you can expect from HMO as well as PPO largely depend on the insurance company and the type of plan that you opt for. However, they remain fairly similar.
4. Claims
Subscribers of HMO do not need to file any sort of claims, as your insurance provider directly pays the healthcare providers. Subscribers of PPO might end up paying for services from their pockets if they visit out of network providers. You would then need to file a claim for reimbursement.
5. Referrals
Members of HMO do not need any sort of referrals during an emergency or visits to an obstetrician or gynaecologist.
6. Pharmacy
The number of pharmacies that you have access to in HMO is limited, as is the case with providers. On the other hand, PPO subscribers can fill their prescriptions almost anywhere. However, the network pharmacies, will end up paying an additional amount.
Which One Should You Opt For?
The PPO health plan vs HMO eventually comes down to personal preference. Each plan brings advantages to the table with some drawbacks. By now, it is easy to understand that an HMO plan is lighter on your pockets but offers limited access to physicians. On the other hand, PPO plans offer a great deal of flexibility and freedom.
For the statistics enthusiast in you, more people opt for PPO plans than HMO plans. For the year 2014, 58% of workers opted for the PPO plan while only 13% opted for the HMO plan. As per the National Committee for Quality Assurance, people subscribed to HMO have better customer satisfaction ratings.
