How to Choose Between Health Plans – HMO Versus PPO
Choosing an insurance plan can be confusing, especially if you don’t fully understand the different types available to you. PPO (preferred provider organization) plans are the most popular, with 57% of covered workers choosing this type of plan. HMO (health maintenance organization) plans are fairly popular as well, covering 14% of eligible employees. So if you’re struggling between an HMO versus PPO plan, which is the right answer?
When it comes to these two common options, the following will break down the differences and leave you better prepared to choose the plan that will fit your lifestyle and needs.
What Is an HMO Insurance Plan?
An HMO plan has one major advantage compared to other coverage options. You can expect lower monthly premiums and smaller out-of-pocket payments for medical services. However, these savings come with the price of less flexibility.
When considering an HMO plan, start by exploring its in-network providers. If you’re already working with a primary care physician (PCP) and want to continue seeing them, they’ll need to be included in the HMO network. If they’re not included, take the time to make sure you’ll be satisfied with a different PCP, as you’ll rely on them for nearly all of your healthcare needs. With an HMO plan, a PCP referral is required before specialist appointments.
If you’re worried about high premium costs eating up your budget (knowing what your premiums go towards could help you feel better), an HMO is probably the better option for you as long as you’re satisfied with the available providers. You’ll also find comfort in knowing monthly payments won’t increase based on completed appointments or procedures.
What Is a PPO Insurance Plan?
What an HMO offers in affordability, a PPO makes up for in flexibility. While there is still a network you’ll be encouraged to stay in, you’ll find you have fewer restrictions when it comes to seeking out-of-network treatment. Just keep in mind that even if your PPO pays for these services, it could be at a lower rate than an in-network provider.
You also don’t have to see your PCP before seeking treatment from a specialist. But this flexibility comes at a price. You can expect higher monthly premiums when choosing a PPO along with higher out of pocket expenses.
A PPO plan often makes sense for those who are willing to pay a bit more to stay with a physician or specialist without having to worry about networks or referrals.
How to Choose Between an HMO versus PPO
Now that the basic differences between the two plans have been laid out for you, it will hopefully be easier to choose between the two. But if there isn’t an obvious choice, ask yourself a few questions.
- Does my budget require me to choose a plan with the lowest monthly costs?
- How important is it that I get to choose my own doctor?
- Do I already have a doctor or medical team that I want to continue working with?
If cost is more important, an HMO is often your best choice. But if having more options when it comes to providers is non-negotiable for you, consider a PPO plan.
Choosing an insurance plan doesn’t have to put you into a panic. While there will always be terms and fine print to consider, there should be a plan that makes more sense for you and your family.
If you need a bit more guidance in choosing between an HMO versus PPO plan, Benefits Solutions Group can help.