…..whatever works best for your current situation!
With open enrollment coming around the corner, I thought it would be nice to give a brief description of the differences between a Health Maintenance Organization (HMO) and a Preferred Provider Organization (PPO).
First off, a HMO is a prepaid health plan. The doctors that are in the network are already compensated for providing you health care. They get paid regardless. With a HMO you typically choose a primary care physician (PCP). The PCP is the first person that you go to if you are in need of medical care. If you need to see a specialist (such as a dermatologist), you need to go to your PCP first and then they will refer you to a dermatologist in the HMO network. This is one of the nuisances of a HMO that seem to turn people off to them. HMO’s also may have less participating doctors than a PPO. If you like your current doctor and are thinking of switching to a HMO, make sure and ask them if they participate in the HMO. Otherwise you will be stuck searching for a new doctor. Although, HMOs seem more comprehensive, they are typically quite considerably cheaper than their PPO counterparts. I will explain why next.
A PPO is a network of participating doctors that your insurance company has negotiated discounted rates with. As long as you stay within the network of doctors, you pay lower fees, copayments, etc. The thing that makes a PPO different than an HMO is the ability to choose your doctor. If you do not like any of the doctors in the network, you are free to choose an out-of-network doctor. However, doing this means you will pay more out of pocket. You also do not need a referral to see a specialist. These added freedoms also add to the price. The premiums for these plans are typical double or triple the amount of a HMO. These plans also typically have deductibles, larger copayments, etc.
When you are comparing HMOs vs. PPOs, you need to weight all of the costs. Look at your past bills and see what it would have costed you for each plan you are comparing. I hope to have a future post about all of the options in PPOs and HMOs to help you undertand them better. I also want to do a post on health savings accounts (HSAs) since many companies are now moving toward them to cut costs.
Does anyone have any specific questions that they would like addressed in a future post? Any interesting stories about your health insurance? You can leave a comment or send me an e-mail with a question. I love reading them!