What is the Difference Between HMO and PPO Health Insurance?

Health insurance is important and necessary for everyone. Doctor and hospital bills can be expensive, so you need to search for the best health insurance plan that works for you. HMO and PPO are both possible plans to choose from, and each has its own advantages and disadvantages.

HMO Medical Insurance Plans

“Health maintenance organization” is the meaning of the acronym HMO. This plan has something called a provider network. HMO plans will make contracts with several different doctors and health professionals. One of the advantages of this plan is the ability to save money when you go to a physician or healthcare professional that is a part of the HMO network. The co-pays and premiums are lower than that of other plans.

A disadvantage of HMO is its rigidity. If you decide upon an HMO plan, you’ll have to find a PCP. PCP stands for primary care provider, and this is your main doctor. If you are currently seeing a doctor who isn’t a part of the network, then you will have to switch. If you have any care that is done by someone who is not in the HMO network, then you have to pay a lot.

Another disadvantage is the fact that you can’t see specialists immediately. Your PCP must refer you.

PPO Medical Insurance Plans

“Preferred provider organization” is the meaning of the PPO acronym. It has a provider network as well. An advantage of choosing a PPO plan is the fact that it will help pay for care that is done by doctors that aren’t a part of the network. Another advantage is that you will have reasonably low co-payments. Unlike HMO plans, PPO allows you to visit specialists immediately; no referrals necessary. This is much more convenient.

A disadvantage of PPO plans is the fact that you will have to pay a lot of money if you visit doctors that aren’t a part of the provider network. PPO will pay for some of the cost, which is different from HMO. However, PPO will most likely make you pay higher co-payments than HMO for doctors in the network.

A health insurance plan is very important to have, so you need to decide whether an HMO plan or a PPO plan will be best for you. Each has its own pros and cons, so there is a lot to consider before choosing one or the other.

Disclaimer: This is for information purposes only and NOT a recommendation from Mills Insurance. Please contact a licensed insurance specialist to discuss insurance coverage’s and laws.