Differences in HMOs (Health Maintenance Organizations) and PPOs (Preferred Provider Organizations) can be difficult to distinguish and this results in many being confused as to which type of organization they should use for their medical care. However, if you know your needs and you understand the positives and negatives of each type of organization, you can make a much more informed decisions about which type of provider to use.
The first thing that you need to realize is that an HMO and a PPO pretty much do the same thing. They allow the insured to get their medical care covered at a substantially lower out of pocket cost than they would without insurance. However, dependent upon your personal medical needs and your financial situation you may want to carefully consider which one is most appropriate for you.
The first thing that you need to consider is the financial aspect of your insurance provider in comparison to what you need. If you using an HMO you can generally expect to have no deductibles and they generally have substantially lower co payments that are required for services rendered.
If you are using a PPO, you will most likely have a deductible, but you will have a lot more flexibility than you would have through a standard HMO, which is a lot more restrictive.
With an HMO you are required to see HMO member physicians unless it is physically impossible for you to do so. This is generally the case while traveling. Then when you need to see a specialist you have to talk to your primary care manager to get a referral in order to see the specialist. This means that it could take you much longer to see the appropriate people that you need to see. The specialists that you see also have to be members of the HMO network as well. This makes it much more complicated if you have a serious condition that requires you to see multiple specialists during a given period of time.
With a PPO however, flexibility is key. You can see a specialist without seeing a primary care provider. Also, one of the best features is that you can see virtually any physician that you want. Generally you are going to have a much lower co payment if you see a member provider within the PPO network, however, you will still have the majority of your medical expenses covered through other providers as well. The same is true with specialists, which you can see as you wish without a referral. You get to select who you want inside or outside of the network, however your co payment could be different depending upon who you choose.
It is up to you to determine which type of provider you need for your own individual circumstances, but typically you’ll find that a PPO is best for those that live in small towns, travel a lot, or don’t require frequent medical care. The HMO is generally better for those that have frequent medical needs as the co payment is generally substantially lower than a PPO, allowing for substantially less out of pocket expense to the insured. Both provide high quality insurance, it’s just a matter of which one better suits your needs as a consumer.