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What are the differences between HMO and PPO health insurance policies?

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There are several distinct differences between an HMO health insurance plan and a PPO health insurance policy, ranging from what the insured person has to pay, to where they can go to get medical care. Both have advantages and disadvantages when compared together, and for most people deciding which one to use will depend on their specific healthcare needs. Here are some of the major differences between an HMO and a PPO, to help you make a better informed decision. In both types of coverage, there is a network of care givers to choose from, but a PPO is more lenient in allowing you to see physicians which are not in the health insurance network.

In an HMO, you would choose a primary physician who would be responsible for diagnosing any medical problems and then referring you to specific specialists for additional care. This primary physician is sometimes called a gatekeeper, because it is their job to manage your health care and reduce costs by reducing the number of unnecessary visits to expensive care givers. In a PPO, you still have a primary physician, but you are free to choose your own specialists.

An HMO is usually less expensive than other types of health insurance. This includes both the premiums you pay as well as your copays, so long as the care you receive is within the HMO network of physicians. Where this changes is if you should decide or need to see a physician outside the network. In a PPO, the plan will still pay the network contract price for the care, and you only pay the difference in cost. With an HMO, the plan may not pay any of the cost of visiting a physician outside the network, leaving you to pay the whole bill out of pocket. For this reason, a PPO may be a better choice if you have a family doctor that is not in the network, but you do not want to give up his care.

answered Jul 16, 2012 by anonymous
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