One of the most common questions that insurance industry insiders field from potential clients is the difference between an employee benefits HMO and PPO plan. “HMO” stands for health maintenance organization, while “PPO” means preferred provider organization. Which type of plan is right for you and your family depends on what health care benefits you value the most.
What Do You Value Most?
Listed below are a few of the more common benefits that patients are concerned about, and how both HMO and PPO plans address them. This should give you a better understanding of which would be best for you:
- Flexibility: Both HMO’s and PPO’s are groups of designated providers contracted with an insurance company. The difference is that with an HMO, you’re required to see only those practitioners that participate with the plan. You must designate a primary care physician, and all referrals to specialists must be made through that provider. PPO’s allow you to see a wider range of doctors, and even offer coverage for out-of-network providers.
- Responsibility: In-network providers work with insurance companies to settle on a rate or fee schedule for services rendered. Thus, if you’re seen in-network with either an HMO or PPO, you don’t have to submit a claim. However, when you’re with a PPO, the responsibility of submitting claims for out-of-network providers falls to you. You’ll typically also have to sign an Advanced Beneficiary Notice informing you that the doctor you’re seeing is out-of-network before receiving services.
- Price: The added flexibility offered by a PPO plan comes at higher premium, which in some cases can be as much as four times that of an HMO. The low cost for coverage is one main advantages of an HMO plan.
Not knowing the in’s-and-outs of your insurance plan could place you in a bad spot when you or a family member is in need of coverage. Feel free to contact us here at Sackett & Associates Insurance Services to clear up any confusion regarding your plan options, or subscribe to our blog or like us on Facebook to stay connected with changes in the health insurance industry.