Whether you’re considering open enrollment with a major insurance company, or simply wading through your benefits package at work, at some point you’ll be confronted with the terms “HMO” and “PPO,” and asked to choose between them.
Of course, in order to choose, it’s important to understand what each term means, because while both refer to networked prepaid health plans, there are some differences.
An HMO, or “health maintenance organization” is a group of healthcare practitioners, often associated with a plan-owned hospital, such as Kaiser Permanente, that includes doctors, nurses, lab techs, and any number of other personnel.
As a member of an HMO, you first select a primary care physician, or PCP. This person will be responsible for overseeing all of your medical care, and will also refer you to any specialists you may need to see, so, if you have a sports-related injury, you’ll speak with your PCP first, and he or she will refer you to a sports-medicine specialist, or an orthopedic surgeon, or whichever other specialist is most able to treat your injury.
Because everything is handled in-house, from lab tests to getting prescriptions filled, HMOs tend to be less expensive and more comprehensive than PPOs. On the other hand, some patients feel that medical care from HMOs is more about efficiency than caring.
Like HMO, PPOs, or “preferred provider organizations,” are prepaid health care associations, but while the doctors at an HMO are paid by the actual hospital, the doctors in a PPO are members of individual practices and have negotiated discounted rates with your insurance provider.
While PPOs also generally ask you to select a primary care physician, they generally do not limit your access to specialists. If you feel something specific is wrong, you can go to any doctor you wish, whether in or out of the network your insurer uses. Either way, you will pay a copayment, and there will be some kind of deductible, however if the doctor you choose is not part of the network, you may have to pay for treatment at the time it is rendered, and request reimbursement from your insurer. Your copay will definitely be higher, and you may have less coverage with out of network doctors.
Which is Better?
The honest answer is that, when it comes to PPO vs. HMO, which one is better depends on you. If you aren’t sick very often, and need maximum flexibility when it comes to providers, or have a favorite doctor who isn’t part of an HMO, a PPO plan may be the best solution for you. If you have a chronic illness, are on regular medication, or simply prefer to deal with all your medical needs in one place, an HMO might be the wiser choice. Before making a decision, take a look at your past history.