HMOs and PPOs: What Are the Differences?
Managed care is a term that describes the services provided by entities such as health maintenance organizations (HMOs) and preferred provider organizations (PPOs). Care provided via these organizations is meant to help reduce the cost of health care for both individuals and families.
HMOs provide a full range of health care services. They have a high concern for wellness and therefore also provide many preventive care options.
Care recipients in an HMO plan generally pay one fixed monthly premium, regardless of how much care is received during that time. In return, members must obtain their care from doctors and other facilities that are within that particular HMO network.
One of the benefits of an HMO includes low out-of-pocket costs. Rather than worry about a wide range of deductibles and co-payments, a member’s monthly fee covers a great deal of the costs. This arrangement also reduces paperwork for the member.
In addition, there is usually no lifetime maximum benefit with HMO plans. Therefore, members will continue to be covered for as long as they need treatment and are in the plan.
PPOs have contracts with a wide variety of physicians and hospitals in order to provide care to members at a discounted rate. PPOs generally have deductible and co-payment requirements. Unlike with HMOs, PPO members’ monthly premiums might not cover all their care, so they may be billed for the difference.
Advantages of a PPO include open access and choice of providers. For example, PPO members may see a care provider who is out of the network, although they will likely receive a higher reimbursement amount if they see in-network providers.
With a PPO, a member’s out-of-pocket costs are also typically limited for services that are covered within the plan. There is normally an out-of-pocket cost cap for individuals as well as for families.
Regardless of whether you choose an HMO or PPO, it is important to read over the specifics of each plan to know what’s covered.
Heath insurance in California is generally packaged to fit your price expectation so learn the differences. There are many plans available. An independent agent that represents many carriers can simplify the process of choosing a plan for you.