Having health insurance can provide peace of mind during uncertain times. But choosing the right insurance has become a little more difficult and convoluted over the years. One of the decisions you’ll need to make as you peruse available options, is whether to go with a Health Maintenance Organization (HMO) or a Preferred Provider Organization (PPO). Read on to learn more about the pros and cons of an HMO vs. a PPO insurance plan.
HMO vs. PPO: Choosing a Doctor
HMOs and PPOs are two types of managed health care. One of the key characteristics of an HMO vs. a PPO insurance plan is the need to designate a primary care physician (PCP). HMOs typically require you to select a PCP who then coordinates your medical care as a sort of gatekeeper. You select the PCP from a list of physicians within the plan’s network of approved providers who have an agreement with the carrier to charge lower rates for services. Additionally, if you have an HMO, the insurance carrier won’t cover services provided by out-of-network providers, so your options are more limited.
Under a PPO, on the other hand, you don’t have to select a primary care physician who coordinates your care. And while PPOs also have a network of providers (which is often larger than the HMO’s network), you can also go to doctors outside of the PPO’s network. This means you have more options available for your medical care under a PPO.
HMO vs. PPO: Seeing a Specialist
As a patient, another major difference between the HMO vs. PPO is the way in which you obtain care from a specialist. Under an HMO, your PCP must refer you to an in-network specialist before you can schedule an appointment. So, you would first have to be seen by your primary doctor, get his or her referral, and then schedule a separate appointment with the designated specialist. Meanwhile, someone with a PPO can bypass the referral process and schedule an appointment directly with a specialist of their choosing.
HMO vs. PPO: Cost Differences
The area where HMOs often look more attractive than PPOs is in the cost factor of the analysis. HMOs generally come with lower monthly premiums than your typical PPO plan. Also, while PPOs allow you to select providers outside of their network, you’ll usually pay a higher percentage of the costs for those services, and a separate deductible might apply in those cases as well. HMOs, on the other hand, simply don’t cover out-of-network providers so you know you’re taking on the cost of those services if you have an HMO.
Related to the cost factor is the insurance claims process. Because HMOs only cover in-network providers who have a relationship with the insurance carrier, you usually don’t have to file your own insurance claims. However, with some PPOs, you may have to pay for services first and then file a claim for reimbursement after the fact, especially if you’re going to an out-of-network provider.
HMO vs. PPO: Conclusions
The decision whether to sign up for the HMO, PPO, or some other plan depends on your individual needs and circumstances. If you need flexibility and more options for care, a PPO might suit you better, assuming you can afford the higher costs. However, if you don’t need to see specialists at your convenience, are ok with your primary physician directing your care, and need a more affordable option, the HMO might work fine for you. Carefully reviewing the needs and circumstances of you and your family, as well as the particulars of what your options are will help you choose the plan that’s best for you.
Obligations of the Insurance Company
Regardless of whether you choose an HMO, PPO, or some other health insurance plan, your insurance carrier and its agents have certain legal duties. While these duties vary somewhat from state to state, insurance companies are generally obligated to act in good faith in conducting its business operations and dealing with clients. This includes acting fairly and honestly in handling claims and abiding by the terms of your policy. If your insurance company fails in its obligations under the law, you may be able to seek compensation through a breach of contract or bad faith lawsuit (ß will replace with “What Is Insurance Bad Faith” once it’s been published).
Having Issues with Your HMO or PPO? Get Legal Help
Over the years, insurance laws have only become more numerous and complicated. However, many of those laws are meant to protect you, the consumer. If you’ve run into issues with your HMO or PPO, such as an unwarranted refusal of coverage, or an illegitimately denied claim, contact an experienced local insurance attorney who can help protect your insurance rights.