It can be a confusing process and a frustrating experience to choose a suitable health insurance plan for you and your family. Regardless of whether you’re offered a group plan through your employer, or you’re working through an individual policy, it’s easy to get confuse between co-pays, deductibles, primary care physicians, HMOs and PPOs. Proper health insurance is crucial to protect yourself and your finances, but what’s the difference and what coverage do you need?
Health insurance protects individuals and families from having the responsibility of paying thousands of dollars in medical treatment each year. With adequate health insurance, a simple ear infection can be cleared up with a minimal co-pay at the doctor’s office and a small pharmacy charge for the antibiotics.
Without coverage, the same ear infection would cost you hundreds of dollars. Those who have health insurance coverage are more likely to receive routine physical examinations and preventive care which prevents potentially serious conditions which is essential for long-term health.
Two of the most common group health plans are Health Maintenance Organizations (HMO) and Preferred Provider Organizations (PPO). Both can be affordable healthcare options, but they do have significant differences. We will explain all the major differences and help you decide which plan best fits your needs.
The main feature of most HMO plans is the primary care model. Members of an HMO plan must select an in-network primary care physician to coordinate all of the medical care. This allows members to choose their own doctor, but if your preferred doctor is not in the HMO network, there is no coverage. Members must select another doctor within the network in order to have the medical visits covered by insurance.
With an HMO plan, consumer costs tend to be much lower than with a PPO. HMOs typically have no deductible and low co-payments, resulting in minimal out-of-pocket costs. However, the tradeoff is that HMO plans limit care to in-network physicians.
The PPO plan differs significantly from HMOs because those who opt for the PPO plan will be able to see almost any doctor of their choice, provided they are part of the network. PPO networks are much broader than HMO networks. Within a PPO plan, patients aren’t tied down to a single primary care physician; they can go see any doctor at any time within the network. Patients are free to switch doctors at any time or see a specialist without a referral.
In-network care is encouraged through lower co-pays and more comprehensive benefits, but out-of-network care may still be partially covered.Premiums are typically higher than HMOs, and deductibles typically range from $500 up to $2,000.
Deciding Between the Two
For patients who can afford a higher premium, and want more freedom in their coverage, a PPO might be worth considering. A PPO is also a good choice for those who frequently visit specialists such as chiropractors or podiatrists. For those who need to focus on keeping their costs low, and don’t mind choosing a doctor within a small network, HMO may be best.
These are just general guidelines; contacting your local insurance agent or family physician for specific details is the best way to determine which plan best fits your needs.