If your health care options include the choice between an HMO and a PPO, you will need to determine whether or not your trusted doctors participate and, if not, if you will be able to afford your share of their fee if you opt for a PPO. Some women feel the value of continuity, using a doctor they have seen for years, provides more secure diagnoses. If this happened, you could pay for out of network medical care. To estimate your actual health care costs, be sure you know what each system offers.
A health maintenance organization (HMO) and a preferred provider organization (PPO) are both managed care plans. A managed care plan is a method of payment for and providing health care for a set fee while using a network of hospitals, doctors, and other health care professionals. The managed care plan will monitor and at times limit the care that it’s doctors provide to members. Their goal is to make sure unnecessary and expensive services are minimized for it’s members.
Many health insurance companies offer HMO, PPO, and/or HSA health care coverage. Here is an explanation of each type and the difference between them:
PPO
Preferred Provider Organization based insurance has higher monthly premiums than HSA or HMO insurance. Being able to visit any doctor or schedule an appointment with specialist without referral is the main difference in using a PPO plan. This saves time and sometimes enables faster treatment. The cost of visiting a hospital or doctor, however, is still lower when a health provider is used with the PPO’s network. As with an HMO, coverage is fairly comprehensive.
HMO
Health Maintenance Organization based policies cost less than PPO but are more restrictive than HSA or PPO coverage. If a specific treatment or referral to a specialist is needed, HMO members will have a primary doctor who can request approval from the HMO. In most situations, it is a requirement to use health care providers, which are part of the HMO’s network. HMO insurance programs, like HSA and PPO, are available for both individuals and employee groups.
HSA
Health Savings Account policies combine high-deductible insurance coverage with access to a tax-free savings account to be used for small to moderate medical expenses. Various rules apply as to how much can be saved in the HSA and the purposes for which it can be withdrawn. HSA-based coverage premiums are less expensive than HMO or PPO and it allows for more choice in health care providers. However, it becomes the individual’s responsibility to save for many medical costs.
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