HMO vs PPO
HMO vs PPO
How an HMO and a PPO Differ in Covering Your HealthcareIf you are eligible for job-based coverage, you may have a very important decision to make. Many employers offer their employees several types of plans to choose from, including HMOs and PPOs. In order to make the best choice for you and your family, you need to know the difference between the two, and the advantages and disadvantages of each.
HMO vs PPO - HMOsHMO stands for Health Maintenance Organization. It is an organization of healthcare providers, such as doctors and hospitals that have contracted with an insurance company to offer their services at a set price.
The major advantage to HMOs is the cost. HMOs are cheaper for the consumer. Premiums are lower than those for other types of plans. Copayments are typically low, or have no cost. Most HMOs are businesses and therefore require profits to exist. They have to make money somehow, and often this means that doctors must see as many patients as possible each day and minimize costs for the organization.
HMO vs PPO - PPOsPPO stands for Preferred Provider Organization. These organizations also have contractual relationships with insurance companies. However, PPOs are more loosely organized and are not as restrictive as HMOs.
If you have a PPO, you can see whatever doctor you like, but if you choose an out-of-network physician, you will have to pay more out-of-pocket. You will not need a referral to see a specialist.
HMO vs PPO - CostPPOs cost more than HMOs, but many people choose them because they are less restrictive. You will have more control over your own healthcare decisions than you would have under an HMO.
HMO vs PPO - Cost and Relationships
HMO vs PPO - What You Can AffordOften, your financial situation will make the decision for you. HMOs are significantly cheaper, and limit your out-of-pocket costs. However, if you want more autonomy in making your healthcare decisions, PPOs are a better bet.
HMO vs PPO - Choosing Your Doctor
Also, the relationship you have with your family doctor may be a factor in your decision. If you like your doctor and he or she is not a member of the HMO network, you will probably want to choose a PPO so that you can continue seeing him or her. However, if you do not have a single source of care, or are looking to change doctors, either option would work for you.
Whatever you decide, it will be better than having no insurance at all. Some people are happy with their HMOs, while others feel they are too restrictive. Some praise their PPO plan, while others complain about the higher costs. Choose what makes the most sense for you and your loved ones.
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