What's the difference between a PPO and an HMO?

What is a PPO?

A PPO or preferred provider organization plan gives you more flexibility in choosing a doctor and also more control over the amount of care you receive.

PPO advantages

• The standard co-payment is $10 for a routine office visit during regular hours.
• You may go to any specialist without permission, as long as the doctor participates in the network.

PPO disadvantages

• If you see an out-of-network doctor, you might have to pay the entire bill yourself and then submit it for reimbursement.
• The PPO deductible is often the highest among small to mid-sized employers and rising. The median deductible for individual coverage for PPO plans was $1,000 in 2008 up $750 since 2000.
• You might have to pay a deductible if you choose to go outside the network, or pay the difference between what network doctors and out-of-network doctors charge.
• PPO plans may charge you higher co-payments than what is specified on the plan if the physician charges more than what is considered “reasonable and customary".

What is an HMO?

A HMO or heath maintenance organization often has the least expensive premiums but at the cost of being the least flexible of all health insurance plans. HMOs are designed for health maintenance and provide adequate care in an emergency situation while making you pay as little out-of-pocket as possible. You must select a doctor up front from the HMO pool. This will be your primary care physician who is repsonsible for your care and referrals. Some see this as an advantage, and others see it as a disadvantage. 

HMO advantages

• Cheaper co-payments typically $15-$20 for each visit, minimal paperwork, and coverage for many preventive-care and health-improvement programs.
• Usually you have a wide selection of physicians and hospitals on HMO plans.
• Basic health services with an HMO typically include physician services, outpatient services, medical treatment, short-term mental health services, and outpatient/inpatient emergency room visits.

HMO disadvantages

• If your physician is not on the plan, you will have to get special permission and pay a higher proportion of the cost of the office visit or you will have to pay for the entire treatment from that physician.
• HMOs require you to see network doctors, or you'll have to pay most of the bill or all of it.
• The HMO directly and indirectly controls the amount of health care that the doctor is allowed to provide to you.
• You must get a referral from your primary care physician to see a specialist.
• If you require lab work and don't use a lab physician in the network, you will not be reimbursed for lab work.
• If your regular physician drops out of the HMO plan, you must look for another physician that is in the plan, or pay a higher cost for using the same physician.

So how can we help?

Taylor Benefits is an insurance agency located in San Jose, California and serves clients not only in the Silicon Valley but all over the state of California. With over a decade of experience in the world of health care, we use our knowledge of the system to get you the best value in a health insurance policy.

If you're an individual looking for health insurance for yourself and/or your family, please use this online quote request form to get a breakdown of health insurance options and to compare rates from many California insurance carriers. If you are a business in search of an employee benefit plan, please submit this group insurance proposal request form. There is never any obligation and this is an easy first step in assuring you get the best plan at the best rate.

If you have any questions before of after, please  call our office at (408) 358-7502.

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