Affordable Health Insurance - Should You Go HMO or PPO?

Affordable Health Insurance: Should I go HMO or PPO?

Life is full of choices. And each brings their many questions. One area that in recent years has opened up to more choices is in choosing a health insurance plan. It is true that in recent years many companies have eliminated or cut back on employer based healthcare insurance plans. There are also many companies who in an effort to cut costs, have merely changed health insurance plans. And more often than not, rather then leaving workers without medical insurance such changes actually offer them more choices. In many cases, while the change in medical benefits may be costing them a little more than when their employers paid 100% for health insurance, workers find themselves with more options.

When faced with the decision of choosing a healthcare plan offered by an employer the question a worker usually is asked to answer is “should I select an HMO or PPO”. In order to answer this “age-old” health insurance question it is important that health insurance consumers are clear on the difference.

HMO
HMO stands for Health Maintenance Organization. An HMO health plan is usually your most affordable health insurance option. In an HMO a group of doctors and other healthcare providers have entered into a contract with a health insurance company to provide service to members participating in the plan. HMO’s tend to have very strict rules. In an HMO you must select a primary care physician, and you are required to get a referral from the PCP for any visits to a specialist. As the name implies HMO’s are interested in keeping costs low, by “maintaining” your good health, and therefore most HMO’s provide low cost or no cost “wellness services” such as healthcare screenings, patient education programs, programs to aid in weight loss and quitting smoking. There are usually no copays with an HMO, or if there are, they are usually low. HMO’S are likely the cheapest health insurance you can choose, but they do have more limited choices when it comes to doctors and treatments than does a PPO.

PPO
The PPO is a Preferred Provider Organization. Unlike the HMO that usually is a group of practitioners operating under one roof, the PPO is a network of participating physicians and healthcare practitioners. As such that alone makes a PPO a healthcare insurance option with more choice when it comes to doctors than an HMO. It also makes the PPO more expensive. In a PPO you can see any provider in the network without a referral from the PCP. In most PPO health insurance plans you may also see a doctor “off network” but you will have to pay more for his or her services.

Sometimes the decision is driven by your financial needs. Say you have been used to paying very little or nothing at all for your health insurance. If your employer suddenly changes health insurance plans and you have to choose between HMO or PPO – HMO could be the way to go, as it will be invariably the lower cost health insurance of the two. Some people are perfectly happy with HMO’S. On the other hand generally if you can afford it, and you prefer to have more choice and more control over your healthcare decisions then you will “prefer” going with a PPO.