HMO vs. PPO 

Which Style Of Healthcare Is Right For You?

In some parts of the US, you have the choice of two main styles of medical coverage: HMO or PPO. This is not the case in all states; some states do not allow HMO’s. But for those who have the choice when signing up for benefits/health insurance, there are many things to consider in making that decision, as it will greatly alter how you use your health insurance.

What’s the difference?

HMO stands for Health Maintenance Organization. This style of health insurance utilizes an assigned primary care physician like a “gatekeeper”. When you need to see any sort of doctor you go see your general doctor first and they will then refer you to a specialist if they feel you need to see a specialist.

HMOs also only offer coverage within a set network of doctors. If you choose to see a doctor or specialist outside of that network, there will be no insurance coverage, unless it is a bona fide emergency.

PPO stands for Preferred Provider Organization. With a PPO, you do not need to see your primary care doctor first. You can choose a specialist and make an appointment directly with them.

With a PPO, you can also choose to go to doctors outside of your network if you wish. The insurance will cover this partially. Usually, staying in-network means you have better insurance coverage, but there is still some coverage for out of network doctors.

So, which do I pick?

If you like a simple, easy-to-use insurance option, HMO’s may be right for you. With many HMO networks, you can call one central number to make appointments, order refills, etc. Records are accessible within the HMO network so that you don’t have to track them down to go from your primary care doctor or a specialist. The HMO generally has a website that you can log into and see all in-network locations and doctors. It is one, cohesive, easy-to-use system, which leads to minimal work on your end as all of your doctors, pharmacists, etc., already have a method of communicating with each other.

If you need specialty care, you may prefer a PPO. If you already know you have a frequent need to see specialists (doctors other than your primary care doctor, such as dermatologists, cardiologists, etc.), using a PPO may be more efficient for you. With the HMO route, you will need a referral from your primary care doctor for each specialist, which can delay care as you wait to first see that doctor, get their referral, and wait for an appointment time with the specialist. Using the PPO model of just immediately making an appointment with your chosen specialist can be less frustrating for someone who has a frequent need for this.

If you travel frequently, go for a PPO. HMO’s will NOT cover you when you are out of your regular service area except in the case of a bona fide emergency. So, if you are traveling on a frequent basis and want access to regular care while away from home, a PPO with a national network is a better solution for you.

If cost is a concern, the HMO will be better priced. Because HMO’s use the primary care doctor as “gatekeepers”, this keeps the overall cost of care down. The primary care doctor can tackle many issues that may not actually need attention from a specialist. It makes the system lower cost overall, and that savings is passed on to you via a lower premium.