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How do HMO and Private Plans Compare?

Guest post by: John Clark

Article Overview: People everywhere are faced with the problems of ever-increasing medical costs. Unfortunately, selecting the best health insurance plan for you and your family can be a daunting, time-consuming task. If you are employed, there are two basic forms of employer sponsored health insurance plan options, which are HMO and PPO plans. Both of these health insurance plan types have their distinct advantages and disadvantages, so they must be considered carefully. If you are in the midst of making a decision between an HMO or PPO health insurance plan, it is wise that you understand exactly what each of these health insurance types encompass and what their strong and weak points are as well.

How do HMO and Private Plans Compare?

People everywhere are faced with the problems of ever-increasing medical costs. Unfortunately, selecting the best health insurance plan for you and your family can be a daunting, time-consuming task. If you are employed, there are two basic forms of employer sponsored health insurance plan options, which are HMO and PPO plans. Both of these health insurance plan types have their distinct advantages and disadvantages, so they must be considered carefully. If you are in the midst of making a decision between an HMO or PPO health insurance plan, it is wise that you understand exactly what each of these health insurance types encompass and what their strong and weak points are as well. To begin, both HMOs and PPOs are known as managed health plans. Managed health plans are beneficial to various groups of people because they offer reduced medical costs to their enrollees, which allows these individuals to receive medical care that they may not otherwise be able to afford without any sort of medical plan. Health insurance companies have developed contracts with certain health care providers with the promise to provide specific doctors and hospitals with an increase in business through their health insurance. Doctors, hospitals and other health care providers who sign these contracts will provide their services at a lower cost in return for the increase in business. HMO and PPO health insurance plans combine the contributions of enrollees and the benefits of scale to offer a reduction in medical costs of all kinds.

HMOs, or Health Maintenance Organizations, are health insurance plans that are composed of a network of doctors, hospitals and other health care providers. HMOs are known to be the most inexpensive option amongst these two health insurance types. HMOs that you might be familiar with are those such as Aetna, Kaiser Permanente and others. However, it should be noted that Kaiser and Aetna are the least expensive of the HMO health insurance plans and are also the most restrictive. Under the HMO policies, health insurance providers have agreed to provide their services at fixed prices and the co-payments are usually quite low. Because providers receive less money for their services in these HMO networks, they tend to see as many patients as they possibly can. The most important rule of being covered by your HMO health insurance plan is that you choose your primary physician from their network of health care providers. If you need to see a specialist at any time, you must first be referred to a specialist by your primary physician, or HMO PCP, unless there are emergency or OB/GYN circumstances. HMOs are known for their primary focus on preventative services like immunizations and physicals.

When it comes to PPO health insurance plan options, these will cost more, but they also provide much more. PPOs, or Preferred Provider Organizations, are health care plans that have contracts with insurance companies to reduce medical expenses for their enrollees. Blue Cross Blue Shield is a PPO which you are likely familiar with and is on the high end of PPO health insurance providers. However, the extra money that you spend on the PPO health plan option will allow you more freedoms in consideration to the physicians and other health care providers you are allowed to see and treatments that will be covered by the insurance plan. People who have PPO health insurance plans will need no referral from a physician to see a specialist if they think they are in need of one. However, your PPO health plan will require that you pay more to see a doctor that is not part of the PPO network of providers. Enrolling yourself with a PPO will provide you with more control over your health care plan. When it comes to emergency room visits, most PPO medical plans will cover these visits, unlike their HMO counterpart. PPO health care providers are paid on a retainer basis, which provides them with no incentives to unnecessarily prolong treatment to any patients.

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Article Tags: best health, distinct advantages, health insurance, health insurance plan, insurance, insurance types, medical costs, plan options, ppo plans, private plans
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