Still confused about the right healthcare plan for you and your family? Is it HMO or PPO? While you were juggling between both the plans, there are multiple factors that need to be considered. In this article, we will check which plan is right for you and why many individuals choose PPO plans over HMO plans.
Comparing HMO and PPO plans will help you to make an informed decision to choose what works best for you.
What is meant by HMO?
The full form of HMO is Health Maintenance Organization. It is a health insurance plan that requires every person enrolled in the plan to choose a primary care doctor. The selected primary care doctor is responsible for referring the patient to in-network specialists according to requirements. Each HMO plan covers few health specialists who agree to provide medical services at the best rates based on discussions with insurance providers.
Usually, the benefits of HMO plans are location-based. Some of the key benefits of HMO plans are;
- Low monthly premiums
- Affordable out-of-pocket fees
- Low consultation charges
- Complete care of your health by your primary physician
- Easy settlement of claims.
However, the major drawback of these plans is they require you to stay within the network for complete medical care until it’s an emergency-based case. Adding on, if your trusted doctor is not a part of the HMO network then you need to choose another in-network doctor.
Why choose the PPO plan?
PPO is an abbreviation for Preferred Provider Organization. It is a type of medical insurance plan that allows its participants to seek medical care from any doctor in or out of the network. However, you need to pay slightly high charges to doctors that are out of network. If your doctor agrees to charge the medical services according to PPO rates, still, the PPO plans will make you pay an extra amount. This is because the doctor is not a part of the plan. However, the best part is, participants, do not require any referral to consult with a specialist of the hospital of their choice. Also, the PPO plan offers more flexibility by allowing its participants to choose when and from which hospital they want to seek medical services.
Let’s better understand the PPO plan with an example:
Mr. John has recently enrolled in a PPO plan. He goes regularly to see a physician for monthly physical checkups. Last week, his knee was hurting so he consulted with a doctor who is in-network. He paid his co-payment and some costs of X-rays etc. He also consults with out-of-network doctors and pays them completely. Finally, all his claims have been settled easily as he is under the PPO plan.
Why choose the PPO plan over the HMO plan?
Choosing HMO or PPO is subject to the personal preference of participants. However, individuals choose PPO plans over HMO because of the flexibility and freedom to choose any medical specialist. Even the statistics show that more people were involved in PPO plans than HMO plans.
In simple words, HMO plans are meant to provide medically necessary services at very low premiums and PPO plans are designed to provide a great selection of medical specialists. In PPO, participants need to pay high monthly premiums but they can consult with specialists frequently with few restrictions on out-of-network doctors. Also, in PPO plans, you might have to pay slightly high deductibles compared to HMO. However, the former provides greater access to healthcare specialists and more flexibility with which doctor you want to see. This eventually fills the gap.
In a nutshell, the main difference between HMO and PPO plans depends upon premiums, access to specialists, healthcare coverage, and the size of the plan. If an individual is in good health with no special medical needs then an HMO plan is right for them. However, if they have ongoing medical needs and need more flexibility in switching between doctors, PPO makes the right choice.
I hope this helped you choose the right plan for you and now you are aware as to why more people are enrolling in PPO plans than HMO. To know more do check our other blogs and don’t forget to leave your views in the comment section.
Referencethan:
- https://www.ramseysolutions.com/insurance/hmo-vs-ppo
- https://individual.carefirst.com/individuals-families/health-insurance-basics/understanding-your-coverage/hmo-vs-ppo.page?
- https://www.hindustantimes.com/education/competitive-exams/upsc-annual-exam-calendar-2022-released-at-upsc-gov-in-cse-prelims-on-june-5-101628967949330.html
- https://www.bcbsm.com/index/health-insurance-help/faqs/topics/how-health-insurance-works/difference-hmo-ppo.html
- https://theolsongroup.com/hmo-vs-ppo/
- https://thrive.kaiserpermanente.org/thrive-together/health-care-101/hmo-vs-ppo-advantages
- https://corporatefinanceinstitute.com/resources/knowledge/other/hmo-vs-ppo/
FAQs
PPOs Usually Win on Choice and Flexibility
Why would a person choose PPO over HMO? ›
Choosing HMO or PPO is subject to the personal preference of participants. However, individuals choose PPO plans over HMO because of the flexibility and freedom to choose any medical specialist. Even the statistics show that more people were involved in PPO plans than HMO plans.
Why would a person choose a PPO over an HMO Quizlet? ›
Preferred Provider Organization (PPO): With a PPO, you may have: 1) A moderate amount of freedom to choose your health care providers-- more than an HMO; you do not have to get a referral from a primary care doctor to see a specialist. 2) Higher out-of-pocket costs if you see out-of-network doctors vs.
What is an advantage of a PPO compared to an HMO? ›
HMOs don't offer coverage for care from out-of-network healthcare providers. The only exception is for true medical emergencies. With a PPO, you have the flexibility to visit providers outside of your network. However, visiting an out-of-network provider will include a higher fee and a separate deductible.
Why do many patients prefer a PPO? ›
PPO plans offer better out-of-network coverage.
And like we said before, this benefits patients seeking a high amount of specialized care, because many specialists choose to remain outside of all insurance networks. PPO plans are also more generous when it comes to defining what kind of care can be reimbursed.
Why would a person choose a PPO over an HMO brainly? ›
Final answer:
A PPO provides greater flexibility in choosing healthcare providers and does not usually require referrals for specialists, but it often comes with higher premiums and a deductible.
Why do people get PPO? ›
More flexibility
Unlike an HMO, a PPO offers you the freedom to receive care from any provider—in or out of your network. This means you can see any doctor or specialist, or use any hospital. In addition, PPO plans do not require you to choose a primary care physician (PCP) and do not require referrals.
What are 2 advantages of choosing the PPO? ›
Advantages
- Do not have to select a Primary Care Physician.
- Can choose any doctor you choose but offers discounts to those within their preferred network.
- No referral required to see a specialist.
- More flexibility than other plan options.
- Greater control over your choices as long as you don't mind paying for them.
PPO Medicare Costs. PPO plans tend to have somewhat higher costs than HMO plans, but they generally have larger networks. You also have the flexibility to see doctors out of the network at an additional cost. HMO plan costs tend to be lower than PPO plans as long as you receive care within the network.
What is PPO in medical terms? ›
Preferred provider organization (PPO) A type of medical plan in which coverage is provided to participants through a network of selected health care providers, such as hospitals and physicians.
Disadvantages
- If you need specialized care, you will need a referral from your primary care physician to an in-network provider.
- Must see in-network providers for care-less flexibility than a PPO plan.
HMOs contract directly with employees. PPOs aim at providing high-quality health services at high costs. PPOs focus on preventive measures and outpatient care. Physicians are paid on a flat salary basis in PPOs.
What are the two most common health insurance plans? ›
Ahead, get a better idea of what some of the most common insurance plans have to offer.
- HMO. One of the most common health insurance options is a health maintenance organization or HMO. ...
- PPO. Another common type of health plan is preferred provider organizations or PPOs. ...
- EPO. ...
- POS.
PPOs Usually Win on Choice and Flexibility
If flexibility and choice are important to you, a PPO plan could be the better choice. Unlike most HMO health plans, you won't likely need to select a primary care physician, and you won't usually need a referral from that physician to see a specialist.
Why do doctors not like HMO? ›
HMO plans frequently need primary care physicians to refer patients and have constrained provider networks, which may frustrate some physicians. Yet, HMO plans often have lower consumer out-of-pocket payments, which may appeal to physicians who wish to provide appropriate care.
Why are PPOs more popular? ›
Some policymakers favor PPOs because they offer a model of managed care that is closer to traditional fee-for-service (FFS) than the health maintenance organization (HMO) options previously available to beneficiaries.
Why don't doctors like HMOs? ›
HMO plans frequently need primary care physicians to refer patients and have constrained provider networks, which may frustrate some physicians. Yet, HMO plans often have lower consumer out-of-pocket payments, which may appeal to physicians who wish to provide appropriate care.
Why are PPOs the most popular type of insurance? ›
PPO insurance plans can be a good choice for individuals who want the flexibility to visit any doctor and hospital and to see specialists without a referral. If you prefer to manage your own medical care without oversight from a primary care physician, a PPO might be the right choice.
What is the disadvantage of belonging to 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.
