HMO vs. PPO

Today, everyone just wants to be insured. Most especially if their health is on the line, people want to avail of the highest quality medical service possible. In this regard, two types of insurances come to play. These are the HMO and PPO plans.

HMO stands for Health Maintenance Organizations. Its medical coverage is quite basic. HMOs assure their members of the simplest health care services, including preventive medical care such as clinic visits or check-ups, physical examinations and immunizations.

However, when it comes to emergency care, HMOs are said to be average. They have a predetermined protocol for emergency situations, specifically for any health care sought outside their existing network of providers. Another downside with HMO, is its inflexible nature. Most people want to seek medical consultations from their preferred doctors, and they cannot do this readily under HMO plans. Under an HMO, they first need to visit their primary care physicians (PCP) prior to availing any medical service. Next, they will have to ask for a referral(s) from the PCP to be able to see any available specialist belonging to the network. It is not possible to be referred directly to your own physician of choice if he or she is not within your HMO’s network.

In addition, HMO also limits the scope or extent of what will be covered in a medical procedure. They already have a predetermined criteria if a certain primary treatment will be covered by the HMO or not.

Because of all these inflexibilities and restrictions, it is but fair for the HMO plan to be justified with a much lower cost as opposed to other insurances. This is also the reason why many corporate clients or companies choose the HMO plan for their employees. Their employees, on the other hand, will only be required to present their HMO cards for their expenses to be shouldered by the insuring company. Some of the most notable organizations offering HMO plans are Aetna and Kaiser Permanente.

PPO is another type of insurance plan popular among many sectors in society, especially by those who can afford to pay its higher premiums costs. What’s good about PPO is that it includes specialist medical treatments on top of the basic regimen offered under HMO. Generally, PPOs are more flexible and less restrictive. The PPO member can go to any specialist within the network without consultations or referrals from a PCP. Because of this nature, big retail clients often subscribe to PPOs. One of the most notable PPO organizations is the Blue Cross Blue Shield PPO plan.

Overall, more consumers of medical services prefer the PPO over the HMO due its flexibility, even if it comes at a relatively higher premium.

1. PPOs are more flexible and less restrictive than HMOs.

2. PPOs charge a higher premium for membership, whereas for HMO it is cheaper.

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