The Difference Between HMOs and PPOs
(ARA) - Making sense of your health insurance options can seem like trying to consume alphabet soup with a fork. HMO or PPO? Which one is right for you?
"There are advantages and disadvantages to every health insurance plan," says Kurt Stammberger, vice president of marketing for Vimo, a company that provides integrated comparison-shopping information for health insurance consumers. "Understanding the different types of plans and how they work can help ensure you choose the one that will best meet your needs and the needs of your family."
Many people, Stammberger adds, may be confused by the difference between an HMO and a PPO.
"Most HMOs require you to select a specific doctor as your primary-care physician. This doctor is supposed to be your first 'port-of-call' for most any medical condition, although exceptions are typically made for emergencies," says Stammberger. "As such, he or she will end up providing most of your medical care."
Your choice of specialists and hospitals is usually limited to those already under contract with the HMO, and your primary care physician is the one who decides whether or not a referral to a specialist is actually necessary.
Primary care providers and hospitals in HMOs are typically paid in advance for a member's healthcare. Therefore, patients can make office visits or hospital stays without filling out claim forms. Co-payments and deductibles, however, may still be required.
PPO stands for "Preferred Provider Organization." PPOs combine some of the characteristics of HMOs with the flexibility of traditional fee-for-service plans.
As with an HMO, PPOs offer a specific set of doctors and hospitals that the member can choose from to get discounted rates. These are called "preferred" or "in-network" providers. PPO members are free to see any in-network provider at any time. Members can also see doctors who are not in the network, but the co-insurance payment for those doctors will be higher.
National survey data from Mercer Human Resources Consulting shows that in 2002, 49 percent of employees in the United States were enrolled in PPO plans. In the same year, 31 percent of employees were enrolled in HMOs, 14 percent in so-called "POS" plans, and 6 percent in indemnity plans with no provider network.
To learn more about the different types of health plans available, and to comparison shop for the plan that's right for you, visit www.vimo.com.
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