When choosing health insurance that works for you, there are many different options to consider. The most common plan types people choose to use are HMO and PPO. HMO and PPO have similar coverage, but there are differences in costs, network coverage, out-of-state coverage, and more. Let’s take a look at the details of the two plans and what sets them apart.
HMO provides access to specific hospitals and doctors that it contains within its network. The network consists of providers who decrease the cost of their rates for those who are members of the plan while continuing to meet quality standards. With HMO, you must see a provider within that plan’s network, or the care is not covered. It is not very common that people can see a provider outside of the network. If you wish to do so, you will have to pay the medical visit’s entire cost out of pocket. HMO also has more requirements than other plans when seeking coverage, such as restricting the number of treatments, tests, and visits.
PPO is different from HMO because it allows more flexibility when choosing a hospital or doctor. They have their network of providers, but with PPO you have more freedom to see a care provider outside of the network. PPO’s insurance will also help cover the visit cost when you see a provider outside the network even if it is at a decreased rate. One distinct aspect of PPO is that your visit to a doctor or specialist does not require you first to see a PCP. In addition, the premiums are often higher, and there does tend to be a deductible.
When comparing the two plans, the differences are embedded in the details. For example, both plans have their own networks, but PPO’s networkers are broader and offer more choices of hospitals and doctors. However, it is important to research the two because the plans will vary. HMOs require you to see a primary care physician who will refer you to a specialist, and the cost of the visit is covered only with the PCP’s referral. PPO’s do not require you to see a PCP first and will still cover the costs of your visit to a specialist. With both plans, it is cheaper to see a doctor within the network. But if you chose to see someone outside of the network, PPO’s will help cover some of the cost, whereas HMO’s will not. Although PPO plans generally cost more, you do get more coverage than what an HMO provides. The premiums and deductibles for HMO’s are lower than PPO’s, but the flexibility is also lower.