It is important to understand the difference between the PPOs and HMOs. HMO’s or the Health Maintenance Organizations come to an agreement with the policy holders that they will have to pay a monthly insurance bill to them, so that they can freely visit a health care provider or doctor, even when they do not need any particular medical attention during that month. Policy holders do not have to really fall sick so that they can visit the doctor every month. What they can do is, go for a routine checkup, even if there is nothing really wrong with their health. The deal sounds good enough and while this is true, HMOs also tend to provide a vast array of medical service under their insurance plans for their policy holders.
Whereas PPOs or the Preferred Provider Organizations include a network of health care providers or doctors who provide services to only a specific group of insurance policy holders, there are a number of companies desiring to have insurance policy plans for their employees. Employees of a company thus form a specific group of insurance policy holders. At the time of service the policy holder pays a co-payment, and the remaining amount of the bill is either sent to the in company insuring them or it is paid by the policy holder himself who then gets the reimbursement from the insurance company.
HMO Vs PPO
You don’t have to see a health care provider or a doctor that is included in the network, if you are a policy holder of a PPO or a HMO. While discussing PPO Vs HMO one benefit provided by the PPO or the HMO is that the policy holder can seek medical attention from the out-of-network health care providers and doctors who charge a higher rate. The decision is entirely of the policy holder. A few years ago health insurance plans were simpler. But nowadays they have become more and more complex a choice than ever before.
Medical premiums to be paid and the costs of the medical costs that could be covered are the major considerations of health insurance plans of today. More choices of coverage are available these days than before. It is important for insurance policy holders to decide their choice of the health insurance plans they wish to have, otherwise it is likely that they may not be too satisfied with the choice, especially when the time to use the health insurance plan comes.
What Are The Advantages And Disadvantages Of HMO Vs PPO Health Insurance Plans?
To give you a better understanding on difference between HMO and PPO, let’s look at the two types of networks so that you can look at the working parts and get a much clearer view of how each of these plans work. Then we will take a look at the dollars and sense aspects of each of these two types of plans to evaluate which type would make the most sense to have when you put in to consideration the final factor: Your own personal situation.
HMO vs PPO fact: Both of HMO and PPO plans are types of networks. HMO stands for Health Maintenance Organization and PPO stands for Preferred Provider Organization. They are not health insurance plans per se, but managed care networks initially designed to control health care costs.
HMO (Health Maintenance Organization) Networks
How do HMO networks work? If you have a health insurance plan that is administered by a health maintenance organization, then the doctors and hospitals that accept your plan are all a part of the same tight network of providers. Many times this consists of a central hospital, outpatient surgery and diagnostic centers, specialists affiliated with the hospital, and general practitioners, such as pediatricians in satellite offices.
You will have to choose a primary care provider that in many ways serves as a gatekeeper for the HMO insurance.
In accidents and emergencies this is not the case, as in most states, insurance coverage is required to be the same in or out of network in the case of accidents and emergencies.
Level of Care: Most HMO networks have high standards of which providers they will allow into the network, and are known for quality control when it comes to providing medical services.
Preferred provider organization insurance Vs. health maintenance organization insurance: Level of Benefits In most cases, the level of benefits, what services are covered, and lower out of pocket costs for members are an advantage of these health insurance plans.
What are some disadvantages of HMO networks?
Limited Geographical Availability: HMO networks usually exist in highly populated geographical clusters. Many times they are not available in rural areas or its providers may be a considerable driving distance for those in areas outside a metropolitan area.
Having to Choose a Primary Care Provider: This can be a hard decision because this doctor will be the primary gatekeeper to medical care. It is more difficult to switch doctors and to get second opinions.
PPO (Preferred Provider Organization) Networks
How do PPOinsurance networks work? If you have a health insurance plan that is administered by a Preferred Provider Network, then you can choose any provider within or outside of the network. If you choose to use a doctor that is outside of the network, your coverage for that service is reduced so that it will cost you more out of pocket, but the choice is yours.
In most cases, you can choose to have services provided by any provider without referral, (although many specialist will not see you without a referral) but this gives you many more options as you are not locked in to receiving your care through one doctor.
PPO networks are generally structured like this: Providers agree to accept reduced payment for services in order to accept insurance policies administered through the PPO network. In turn, they are able to have a much larger client base to serve.
What are some advantages of PPO insurance?
Choice: You have a greater deal of choice as to which providers you use, as to which types of services you wish to have done, and it is much easier to switch doctors and to get second opinions.
Availability: PPO networks are widespread and include a very large portion of all providers across the U.S. and include providers in rural areas.
What some disadvantages of PPO networks?
Variation of out of pocket cost. Many providers negotiate the reduced costs for the services they provide so the same service may cost you two different prices between two providers, so if you have one of these plans, it is smart to shop around.
Transferring medical records: Since the records are not maintained centrally, it is more difficult to have records transferred between doctors. This is a situation that is changing with advanced technology.
PPO vs HMO: Putting Your Personal Situation into the Decision
After having all of this info to digest, you have to take into consideration you own personal situation. Do you live in an area that has easy access to an HMO? Do you value a centralized medical approach or do you value choice? Do you like to know beforehand what your out of pocket cost will be or would you rather be able to search for a lower cost provider?
All of these are factors to consider when considering making a choice of health maintenance organization insurance vs preferred provider organization insurance.
Getting more information directly from knowledgeable professionals in your area can also clarify difference between PPO and HMO insurance.
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