Choosing the best health insurance plan can help save you from the incredibly high costs of health insurance in the USA. That is why such a large majority of Americans have health insurance coverage in some way. However, choosing one isn’t always easy. There are hundreds of different options from dozens of different providers that you can consider. The plan you get needs to not only work for you but also your family.
Two of the most popular options out there are HMO (Health Maintenance Organization) and PPO (Preferred Provider Organization) plans. It is important to be aware of the difference between an HMO and a PPO plan, as well as many other things before making a decision.
With that in mind, we’re here to help. In this guide, we’re going to take a close look at both HMOs and PPOs, as well as their pros and cons.
What is an HMO?
An HMO is a plan that provides you access to a number of different doctors and healthcare providers in their network. Every HMO plan has a list of providers who have agreed to work within the plan and offer lower rates for their members and customers. You will be able to choose from this list and pay a cheaper price than if you went to a doctor outside of the plan.
Pros of an HMO
The main benefit of an HMO plan is that they are often more affordable than a PPO plan. Not only are the premiums often lower, but there is generally a very small deductible, if there even is one at all. This makes it affordable for many individuals and families, which is why these plans are so popular. All doctors in the network must meet quality standards, so you can ensure you are getting good care.
Cons of an HMO
While the costs are low, there are also some drawbacks to HMO plans. You are only covered if you visit an in-network doctor, and you may also need to select a primary care physician. This limits who you and your family can see for care. You may need to get referrals in order to see a specialist, and these plans aren’t very flexible. For example, you may only be able to have a certain number of doctor visits or tests able to be done.
What is a PPO?
Similar to an HMO, a PPO plan also has a network of doctors and providers. However, these plans offer much more flexibility for members and customers. There are fewer restrictions on who you can see, and the plan will often pay even if you see someone out of network, though it might be less than if you visited someone in-network.
Pros of a PPO
Arguably the biggest pro of a PPO is flexibility. While they still have a network of doctors that will be the most affordable, you can see any provider you’d like and still get some coverage. You also won’t need a referral from a primary care physician to do so, which can cut down waiting times in some cases. These plans are also ideal if you are traveling, as you can see any doctor or specialist at any time, anywhere in the country.
Cons of a PPO
The biggest drawback of a PPO plan comes down to the cost. All of that flexibility and added benefit doesn’t come cheaply. These plans are more expensive than HMO plans, as they offer more to customers. This is both in terms of higher premiums and higher deductibles, in most cases. While that doesn’t mean that they are a bad choice, it just means that you need to consider your budget beforehand, to make sure you can afford the higher monthly costs.
Hopefully this article and the information included in it is able to help you learn about HMOs, PPOs and their pros and cons. Both are popular options to consider, and the choice you make will depend on your needs and the needs of your family.