Health insurance has become quite essential over the recent past. It has presented itself as quite an important sector in the modern world with everyone insuring themselves and even their families. However, it should be noted that the choice of a health insurance policy should be made with much consideration to ensure its effectiveness. Several factors should be put into consideration to ensure that the plan serves one with adequate coverage and safety which they desire. This paper looks at two of the main insurance policies-Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO). The article takes an inside look at their differences with an aim to help the population in having an idea of what each entails and assist them in choosing the one most suitable for them.
First, the expenses of those subscribed to an HMO plan are only covered when they visit doctors who are in-network. The subscribers select an HMO physician to be their primary health care provider (Insurance.com, 2016). In this case, subscribers have limited choices and accessibility to health care providers since they are entitled to a particular specialist/health care provider. PPOs on the other side are flexible, and they cover for expenses of their subscribers when they visit out-of-network physicians or doctors. Visits to an out-of-network specialist are however placed at a higher fee and include a separate deductible fee (Humana, 2016).
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HMOs also require their subscribers to get referrals from their designated specialists in case of a severe medical condition (Humana, 2016). For example, if one has developed teething problems and they have to visit a dentist, they have to see their designated physician first, who will, in turn, refers them to an “in-network dentist.” When it comes to the PPOs, the subscribers do not necessarily have to obtain referrals so that they can see a specialist. They are allowed to visit any specialists of their choice with accord to the medical condition in question without having to get any referrals. This is because they do not have designated primary care physicians (Insurance.com, 2016).
Also, HMO subscribers are saved the need of having to file a claim. This is so because the subscribers are only allowed to see in-network specialists who are paid directly by the insurance provider. As for PPO subscribers, filing a claim is something they have to do now and then. This is because they have to pay doctors directly especially when they visit those belonging to out-of-network. The claim they file is majorly for reimbursement (Humana, 2016).
HMOs are also cheaper than PPOs. HMOs have low monthly premiums, which gives it an advantage over PPOs. The subscribers also pay relatively small co-payments during their visits to their designated specialists. They also are not subjected to any deductibles, making HMO a pocket-friendly insurance plan. On the other hand, the PPO plan is expensive, and it is associated with higher costs. This is basically because of higher monthly premiums put in place to cover for the flexibility of visiting both in- and out-of-network specialists without referrals (Humana, 2016). Additional, the subscribers have deductibles to be paid as well as co-insurance amounts to pay. Out-of-pocket costs are also higher for the subscribers.
Therefore, it is of great importance for individuals to choose not just any health insurance plan but a plan that suits them best and covers all their health and safety needs. People should evaluate all the factors involved in choosing a specific plan and weigh the benefits against the demerits of the scheme in providing maximum health coverage at minimum costs. Having a good health insurance plan will result in better and efficient access to health care services and better financial health for everyone.
References
Humana. (2016). Which one is right for you? Retrieved from https://www.humana.com/individual-and-family/products-and-services/medical-plans/hmo-vs-ppo.
Insurance.com. (2016). Understanding the difference between HMO, PPO and POS. Quinstreet Inc . Retrieved from http://www.insurance.com/health-insurance/health-insurance-basics/understanding-the-difference-between-hmo-ppo-and-pos.aspx.
