HMOs vs. PPOs

The two most common health plans available these days are HMOs and PPOs. Both can be affordable, and both can offer access to high-quality care. But they do have their differences.

Both HMOs (Health Management Organizations) and PPOs (Preferred Provider Organizations) are kinds of managed care. That means your costs stay lower — but there will be restrictions on how you receive your care.

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What’s The Difference Between an HMO and PPO?

HMOs and PPOs differ in two main ways: cost and access.

With an HMO plan, your costs tend to be much lower. HMO plans often have no deductible, and co-payments are low when you visit a doctor or hospital. This means your out-of-pocket expenses are kept at a minimum.

The tradeoff for these low costs is that your HMO plan comes with restrictions on when you can receive care — and who you can receive it from. To receive coverage, you must get care from a doctor on the plan’s pre-approved list of healthcare providers. And if you need specialist care, you’ll need a referral from your doctor. For some kinds of specialist care, you’ll need approval from the plan’s management.

PPO plans can be more expensive, but have fewer restrictions. Many PPO plans have a deductible between $500 – $2,000. And your PPO plan will have higher monthly premiums.

But with a PPO, you’ll be able to see almost any doctor you choose. PPO plans also have pre-approved lists of healthcare providers — but they also provide coverage when you see provides who aren’t on that list. When you see a pre-approved doctor, you’ll save more money — but you won’t be stuck without coverage if you choose to see an “out-of-network” provider.

Which One Should You Choose?

Choosing the right plan depends on your unique needs — and there’s no substitute for the expert advice of an insurance agent when it comes to sorting those out. But here are some general guidelines:

A PPO may be best for you if:

• You want to be able to choose any doctor
• You have a chronic condition, such as back pain or arthritis
• You’d prefer to use alternative medicine services such as acupuncture or chiropractors.

An HMO may be best for you if:

• You’d prefer fewer billing hassles
• You will need to keep your out-of-pocket costs as low as possible
• You have a family that will need annual physicals, well-baby visits, and OB/GYN care.

For help deciding which option is right for you, talk with our network of agents. They’ll help you sort out your options so you find a plan that works for your health needs and your budget. To get started, use our free service. Fill out our simple form, and you’ll be contacted with free insurance quotes.