If you are considering a change in health insurance plans, now or in the future, and are ever faced with the choice between an HMO and a PPO plan, they can seem frustratingly similar. While plan specific figures, including premium cost, specific availability, and even level of coverage will vary greatly between plans, the general differences commonly found between the two are as folllows:
HMO (Health Maintenance Option) are typically characterized as a general family plan. This is largely because HMOs are most highly utilized in areas with an established medical network, and often requires families to see their PCP (primary care physician) prior to visiting a specialist, even in network.
HMOs classically feature the following distinctions from PPO plans:
- Plans typically require a visit to PCP prior to specialists, allowing the PCP to determine the next course of treatment.
- Coverage may be revoked for visits to specialists when not first referred by PCP.
- HMOs (similar to PPOs) have a network of medical centers and doctors that could disqualify coverage, sometimes even with a referral.
- Typically, HMO premiums are lower than PPO plans, and feature little-to-no deductibles
The restrictions imposed by the “in network” and PCP referrals typically associated with an HMO plan may make it an unrealistic solution for your family based upon geography alone. If you have or develop a great relationship with your in-network family doctor, then HMO plans can be a great way to receive high-quality, comprehensive coverage.
PPO (Preferred Provider Organization) plans give users of the insurance far more freedom in choosing where and when they receive healthcare, provided that their decisions are in network. Interestingly, PPO plans often offer less restrictions on out-of-network coverage, especially when in-network specialized services are not offered. The major contrasting point from HMO plans is the typical lack in PCP referrals for specialized care.
PPOs classically feature the following distinctions from HMO plans:
- See doctors or visit different in-network medical centers without PCP referral.
- Coverage may extend to out-of-network care, often at a slightly higher rate of co-pay.
- Premiums are often higher than HMO plans and frequently come with a deductible
PPO plans are excellent for anyone looking for flexibility, especially when coverage options are limited. For some, having the freedom to see a doctor or specialist whenever necessary is a tremendous benefit; we often recommend those with longer drives to their PCP opt instead for a PPO.