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What’s the Plan? Choosing between an HMO and a PPO

doctorThe easy decision has been made – you need health insurance. But choosing the best type of health network for you or your family can be perplexing. We are talking HMO and PPO, folks.

What’s the difference and what’s right for you? We’re giving you the low down to help you make an informed decision.

Health Maintenance Organization (HMO)

Yep, that’s what those three letters have stood for all this time. An HMO health plan is a tight network of quality health care providers whose services you may use in conjunction with your health insurance plan.

  • HMOs require that you choose a Primary Care Physician (PCP) who acts as the “concierge” for all of your personal health needs. Think you need a specialist? You must first visit your PCP for a referral. Need blood work or diagnostics? Consult your PCP for a referral. Need tickets to Les Mis? You’re out of luck.
  • Health care received outside of your HMO network is typically not covered. There may be a few exceptions in the case of an emergency, but for the most part you’re on your own.
  • HMOs make your medical records easily accessible to all of the health care providers in your network. This cuts out any red tape (i.e. requesting records from another doctor or care facility).
  • By in large, out-of-pocket costs are lower with an HMO. In addition to a lower deductible, this means less cost for prescription drugs and office visit co-pays.

Preferred Provider Organization (PPO)

A PPO plan gives you permission to visit any health provider you choose (including specialists), in or out of the network, without a referral. In this relationship, you don’t have to feel guilty if you want to see other people.

  • Since there is no need for a Primary Care Physician, you can see whoever you wish and easily get second opinions.
  • Health care received outside of your PPO network will be covered to some extent. Typically you’ll be responsible for 20 to 40 percent of the bill.
  • While technology is making the process easier, there may be a higher level of difficulty transferring your medical records between doctors.
  • Due to the increased flexibility a PPO provides, the out-of-pocket cost is typically higher on all fronts.
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