The Difference between an Hmo and a Ppo

The differences between an HMO, health maintenance organization, and a PPO, preferred provider organization, are about cost, convenience, and choice. Both types of health insurance provides relatively good coverage within the same bracket.

Many people opt for the HMO because an HMO tends to cost less for premiums each month, and often come with either lower co-pays or no co-pays within the HMO when working through the primary care physician. If money is the main deciding factor on the type of insurance coverage, an HMO will win almost every time.

The problem with an HMO is that primary care physician stipulation. Your doctor has wide reaching control over the type and quality of your health care. With a broken arm for example, the scenario will go something like this. After you break your arm, you go to the emergency room to get an x-ray and a splint.

The emergency room gives you the x-ray and says that you should see your primary care physician as soon as possible. Because they are heavily booked, you may have to wait 1 to 5 days to get into your doctor. Once you get in to see the doctor, you will be told that your arm is broken and your need to see a specialist that will be recommended from the prefered list.

You will need a referral for this, and you need to get a referral from your doctor that says you actually needed the emergency room visit, or it won’t be covered. The doctor’s office will usually book the appointment with the orthopedist for a date from 3 to 10 days off. The specialist will set the bone if needed and put on a cast. This will occur between 4 and 15 days after you broke your arm.

With a PPO, you will pay a higher monthly premium and higher co-pays. You can go to any doctor on the preferred provider list anytime that you need to go as long as they are accepting new patients. In the previous scenario, you would have booked the appointment with the orthopedist straight out of the emergency room or the next morning.

The time from the break to the cast would have been reduced from up to 2 weeks to 2-3 days. You may even have been able to go down the list until you found a doctor that could see you the same day. There is no need to hope while you’re at the emergency room that your doctor will say it’s ok that you went there. It’s your call.

PPO health insurance is about choice and convenience. You are not at the mercy of a primary care physician. Only you can decide if the freedom is worth the cost.