Most health insurance plans, whether they are through an employer or an individual plan, give you the option of choosing a type of managed healthcare plan. Typically, you are given the option between the two most common types of managed care plans: HMO and PPO. Deciding which plan is best for you and your family depends on number of factors, including budget, frequency of doctor visits, location, and types of services needed.
Managed Care Plans are set up to create a “network” among doctors, hospitals, clinics, labs, and medical equipment vendors. Depending on your plan, you may have access to only your network or you may be able to receive care from outside your network as well.
Pros and Cons of HMOs and PPOs
Enrolling in a health maintenance organization (HMO) means you will need to receive most or all of your health care from a network provider. With a HMO plan, you pick one primary care physician who will coordinate all your health care services. Your doctor keeps track of all your medical records and provides routine care. To see a specialist, you must receive a referral from your primary care physician in order for insurance to cover your cost.
Benefits of an HMO
-Your primary care physician (PCP) coordinates all care, taking the guesswork out of finding specialists or ensuring they are in your network
-Care generally doesn’t need to be pre-authorized before a treatment begins
-Monthly premiums, cost-sharing and deductibles are generally lower than other plans if you don’t expect to need specialized care
Disadvantages of an HMO
-You have much less freedom in choosing providers, since your PCP coordinates all care.
-If you see a provider outside your network, you must pay all out of pocket costs.
Enrolling in a preferred provider organization means your care is covered for providers both inside and outside your plan’s network. Generally, you can go to any health care professional you want, typically without a referral. However, if you go outside your network, you may pay more and some services may not be covered. If you receive care within your network, you are only responsible for your annual deductible and a copayment for your visit.
Benefits of a PPO
-Maximum flexibility of care: You can choose any specialist in your network and make an appointment without a referral from a PCP.
-Provides coverage for care outside the network, however, cost-sharing can be more expensive (aka you may pay more).
-Very little paperwork; most paperwork is handled between the provider and the insurance company
Disadvantages of a PPO
-May have higher monthly premiums, cost-sharing, and deductibles compared to an HMO.
-Pre-authorization may be required for certain types of treatment in order to fully cover the bill.
Which Health Care Plan is Best for My Family?
Choosing the right plan depends on whether you prioritize flexibility or costs. If you want to keep costs low and don’t mind restrictions like staying in-network or getting referrals from your PCP, then an HMO may be right for you. However, if you’d rather pay more to allow you to go out-of-network if needed and to see specialists without a referral, then a PPO may be right for you.
With both HMOs and PPOs, be sure to research the network of providers before choosing a plan (especially for HMOs). If an HMO network in your location only offers an emergency room that is an hour away from you, you may want to consider a PPO instead.
Overall, it’s about balancing out the pros and cons so that the plan is most beneficial to you and your family’s needs. If you have questions about finding the best plan for you, contact us at firstname.lastname@example.org for a free consultation.