HMO Pros & Cons | Snohomish County, WA (2024)

FAQs

What is the downside of an HMO? ›

Disadvantages of HMO plans

HMO plans require you to stay within their network for care, unless it's a medical emergency. If your current doctor isn't part of the HMO's network, you'll need to choose a new primary care doctor.

Doctors often prefer PPOs because they offer greater reimbursem*nt rates compared to HMOs and have less administrative paperwork. Is a PPO a good thing? For many, a PPO's flexibility and coverage make it a favorable choice, but it comes with higher premiums.

Lower cost

Because of the agreed-upon payment level, an HMO usually offers lower monthly premiums than other types of insurance plans. They also tend to have lower copays and coinsurance, which helps make them more affordable.

HMOs promote the growth of beneficial bacteria such as Bifidobacterium while inhibiting the growth of harmful pathogens. A diverse gut microbiome is associated with better digestion and a strengthened immune system [1].

Sadly, many HMOs are run by either incompetent or corrupt bureaucracies, thereby compromising necessary patient care in lieu of their bottom-line. That said, some HMOs are better than others, and both patients and doctors must do their due diligence to determine whether or not to participate.

Many HMOs do a satisfactory job within their organization on routine medical care. If the patient could get better care with a specialist outside of that HMO, the HMO may or may not refer the patient to a place where the patient can get better care." Or the experience of another ex-HMO member: "HMO's are a nightmare!

With PPO plans, you are picking up more of the costs when you get sick or hurt. Copays are higher, deductibles can range from $500 to $5000 and co-insurance usually runs around 30-40% depending on the plan.

The larger networks associated with PPO plans could mean a broader patient base, which can be advantageous for doctors and their practices. On the other hand, some doctors may prefer HMO plans because they often have a simpler billing structure which can reduce administrative overhead.

HMOs are known for their provider networks and lower costs. They are also restrictive and don't cover out-of-network care unless it's an emergency. PPOs offer more flexibility and allow out-of-network care, but that type of care typically comes with a higher cost.

What are the pros and cons of the HMO plan? ›

HMOs have lower monthly premiums and lower out-of-pocket costs. For example, there are no deductibles in CalPERS HMO plans. And you won't need to file claim forms when receiving care in the HMO network. Unless it's an emergency, however, HMO plans require you stay within their network for care.

When you enroll in an HMO plan, you choose your PCP from a list in your area and in a certain medical group. In the case of a PCP, the group is called an IPA or Independent Physicians Association as opposed to a PMG or Primary Medical Group.

PPOs are the most common plan type. Forty-seven percent of covered workers are enrolled in PPOs, followed by HDHP/SOs (29%), HMOs (13%), POS plans (10%), and conventional plans (1%) [Figure 5.1]. All of these percentages are similar to the enrollment percentages in 2022.

HMO plans typically have lower monthly premiums. You can also expect to pay less out of pocket. PPOs tend to have higher monthly premiums in exchange for the flexibility to use providers both in and out of network without a referral. Out-of-pocket medical costs can also run higher with a PPO plan.

One likely reason is the near-term desire of many employers to reduce premium increases. Compared to HMO benefit designs, PPOs typically rely more on patient cost sharing to offset the higher costs of offering broader, less integrated provider networks.