Are you curious to know the difference between HMO vs PPO insurance? then keep reading to have your answer.
Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs) are insurance plans that cover basic and specialized health or dental care.
Moreover, the differences between HMO and PPO insurance include where you receive the care and how they set your prices.
However, in other to select the right option and following the plan guidelines will help you to get the most coverage from your plan at a low available cost.
READ MORE: HMO vs PPO: Things to Consider
HMO vs PPO Insurance: What Are the Differences?
Table of Contents
Then major differences between HMO and PPO plans are costs versus the freedom to select where you receive your health care.
Moreover, you can need the flexibility of a PPO that allows you to choose a provider but pay more monthly when you use your insurance. It may be willing to work within stricter HMO guidelines to keep your insurance rate manageable.
Also, when you want to shop for individual health dental or Medicare Advantage plans, you’ll typically have both HMOs and PPOs to choose from. Each option has its different features to assist you pick the plan that will work best for you.
Concerning the above information, the plan’s healthcare network will play a vital role in your decision. Before you enroll for any program, you can consult your doctors or review plan documents to check whether your provider will accept the insurance.
How Does HMO Work?
An HMO contracts with a network of primary care doctors and various health professionals and page them an aet fee to offer services to its members
To manage the health care costs, the HMO will pass the savings on to members in the form of low-rate premiums. Moreover, the HMO, your primary care physician, or your family doctor is your first contact when you need medical care.
Maybe your PCP determines the need for a specialist, they’ll usually refer you to one within the HMO network. Some of their specialized services are mammograms that don’t require referrals.
Pros of HMO
1. There Are Low Costs
With the low monthly bills, HMOs typically have no or very low deductibles. As the routine doctor visit copays for HMOs are affordable usually between the range of $5 and $25 for each appointment.
2. Easier Billing
Billing is commonly straightforward with the HMO since there is no need for partial billing of out-of-network services.
3. Ease Care
Having the PCP coordinate the health services will make managing health care easier.
Cons of HMO
1. Network Limitations
Apart from emergencies, you will receive care within the HMO network. As you are responsible for the full cost of all other out-of-network services.
2. PCP and Referrals Required
You will need to have a designated doctor that will be responsible for your primary health care needs. Your PCP will also be part of your network. Moreover, except for some preventive care like mammogram screenings, your PCP must refer you to all the specialist visits. For instance, if you go directly to a rheumatologist without a referral, you will pay the total cost out of your pocket.
READ MORE: HMO vs. PPO Insurance: What's the Difference?
How Does PPO Work?
The PPO has a healthcare network but it is less restrictive than an HMO regarding the place you receive the care. Moreover, with a PPO you are free to use providers within and outside your network but you’ll pay for the outside network services.
The cost-sharing approach helps PPOs offer more flexible coverage at affordable rates. There is the main difference between HMO and PPO plans is that with a PPO, you don’t get a referral before you see a healthcare specialist.
However, your insurance company may require prior authorization for specialized care. Before you make an appointment, it is a good idea to contact your PPO to ask about the coverage.
Pros of PPO
1. No Network Limitations
There is no limitation for you in using your network providers. However, except for emergency care, you will pay more for services received outside the plan’s network.
2. No PCP Required
You do not need to choose a PCP to coordinate healthcare or provide specialty referrals.
3. No Referrals Required
You are not required to obtain a referral before seeing a specialist.
Cons of PPO
Another cost difference with a PPO might ne the out-of-pocket maximum. Generally, the limits are higher got outside network care, so it makes it longer to reach the point where those services are covered in full.
For example, the PPO will have one maximum of $7,000 for in-network care and a combined amount of $10,000 for in and out-of-network services.
For this case, you will need to pay $10,000 out of your pocket before any services received outside the plan network would be covered at 100%.
HMO vs. PPO Dental Plans: How Are They Different?
The differences between HMO and PPO dental plans are mostly identical to those in HMO versus PPO medical plans. PPO dental plans have the same flexibility to work outside of the plan network and do not require the primary dentist or a specialist referral.
Like their medical counterparts, HMO dental plans require you to use network doctors, select the primary dentists and get referrals for specialty dental care.
HMO and PPO dental and medical plans are similar in their payment structures when it comes to deductibles, coinsurance, and copays.
There is one main difference between a PPO dental plan and a PPO medical plan. Some PPO dental plans include an annual maximum that is your plan and you will pay for the covered services in a year
When it gets to its limit, you’re responsible for payment for all covered dental services for the rest of the plan for that year. For instance, if the calendar year limit is $5000 and your insurer has paid the amount in claims by August 31st, you will pay for all covered services received from September through December that year.
READ MORE: HMO vs PPO: Differences, Similarities & Things To Consider
Conclusion
The major difference between HMO and PPO insurance is the insurance plans that they cover and specialized health or dental care.
