When comparing HMO and PPO plans, there are few important distinctions to note. A Preferred Provider Organization (PPO) gives you more flexibility and control over your medical care. Instead of choosing a primary care provider from within the plan’s network, you can seek treatment from a provider of your choosing, either in-network or out-of-network.
PPO health insurance plans may be a better option for you if you seek frequent medical attention. Similarly, because you do not have to choose a primary provider, PPO plans are best for those who require specialized care. You can see any doctor without the need to visit a primary care provider first.
While HMO and PPO plans differ in the way you seek treatment, each type of insurance plan has a network. PPO networks are bigger and include a more diverse selection of providers, but you must still seek treatment from in-network providers for the lowest medical costs. While you have the freedom to seek care from an out-of-network provider, it may result in a higher out-of-pocket expense.
However, if you need to receive care from an out-of-network provider, PPOs may cover some of these costs. Your out-of-pocket expenses will be higher than they typically are when seeking care from in-network providers, but the plan typically pays some of the fees. For the lowest costs, it is always best to receive care from with a plan’s network. Note that HMOs do not cover out-of-network care unless it is for a medical emergency.
Since PPO health insurance plans offer more flexibility and autonomy for your medical care, you can expect to pay more for coverage. PPO premiums tend to be more expensive than HMO premiums.
Most PPO plans also have a deductible, which is a designated amount of money you must pay before the insurance plan covers services. The amount of the deductible varies depending on the specific plan or company.
Depending on your specific PPO plan, you may need to make copayments or coinsurance for certain services. These are certain out-of-pocket expenses that you are responsible for paying when seeking certain services. These may include the following types of services or visits:
- Preventive services
- Wellness visits
- Emergency room visits
- Prescription drugs
- Laboratory services
HMO and PPO plans are not your only options for health care. If you are looking for a plan that features a few characteristics of both plans, consider a POS plan. Learn more about this hybrid insurance option in the next slide.