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How to Pick the Right Health Insurance Plan Between A PPO and an HMO

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When searching for an insurance plan, it’s good to have choices. With health insurance, you may have several plans to choose from. Two of the most common plans are a Health Maintenance Organization (HMO) and a Preferred Provider Organization (PPO).

Most of us have heard the terms HMO and PPO at some point but it can be difficult to understand what the difference is between the two. But don’t fret just yet! Choosing the most beneficial plan for you and your family doesn’t have to feel like putting a puzzle together. Let’s take a closer look at the benefits of each.

Benefits of HMOs 

These plans have a specific network of health care providers in a given area. Within this network are a group of physicians, hospitals, labs, and pharmacies that provide discounted services to the insurers.

Since the insurers are only working with a certain number of health care providers they do not provide coverage for out-of-network visits. So essentially, to receive coverage from your insurer you must choose a physician or a specialist that is in your insurer’s network.

You also need to choose a primary care physician. Your primary care physician will be a “gate-keeper” to other specialists. In order to see a specialist, you must visit your primary care physician first to obtain a referral. Along with the predetermined network of physicians, you will also be limited to specific pharmacies.

However, in exchange for these limitations, you pay less in monthly premiums and you may not have to pay some deductibles if you stay in the network. Some of you were probably sold after the lower costs were mentioned. Who wouldn’t want to save some money? But don’t make your decision just yet. PPO’s do have some benefits that may catch your attention.

Benefits of PPOs 

If flexibility is important to you when choosing a physician, this plan may strike your interest. Like an HMO, it still has a network of primary care physicians and specialists but you will have the ability to visit any specialist, lab, or pharmacy you fancy. If flexibility is important to you when choosing a physician, this plan may strike your interest.

Like an HMO, it still has a network of primary care physicians and specialists but you will have the ability to visit any specialist, lab, or pharmacy you fancy. If you visit a physician outside of the network you will still receive some coverage from your insurer but not as much as you would if you stay in the network.

It is also not necessary to choose a primary care physician and you won’t be required to go through them to see a specialist. Due to the fewer limitations, you will typically have some higher monthly premiums and co-pays.

Primary DIfferences Between HMOs and PPOs

• The number of physicians or specialists you can choose from
• Primary care physician requirements
• The coverage is given when seeing an out-of-network provider or pharmacy
• Out of pocket costs (monthly premiums, deductibles, and co-pays)

So, Which Is Better?

Most are probably looking for a clear-cut right and wrong answer. But there is no right and wrong choice when deciding on an insurance provider. We all have different health care needs and there is no one-size-fits-all insurance plan. The best choice depends highly on your specific needs.

For example, an individual that is a senior or others with complex medical needs may prefer a primary care physician that can synchronize their healthcare and keep a thorough record of their health.

For some senior patients, coordinated health care and seeing one doctor for many years is very important. In contrast, some may prefer the flexibility in choosing their favorite doctor and will also find it a hassle to have to go through a primary care physician before seeing a specialist. So ultimately, the plan that will benefit you the most depends on your individual needs.