can someone tell me the difference between a HMO and a ppo and which is better. what is a buy-down and buy up?

Answer 1

An HMO (health maintenance organization) is relatively cheap. The downside is that you have to use "in-network" service providers. If you need to see a specialist, and the nearest in network specialist is 50 miles away, that's who you'll have to take or pay the difference between what the closer one charges versus what the insurance covers.

A PPO (Prefered Provider Plan) is similar in that you get the lowest rates if you use in network providers, but you don't have to. The fee that you pay if you see an out of network provider is generally a standard one and not the full difference in price.

Not every HMO and not every PPO works the same. There are subtle differences in coverage depending on where you live and depending on the company that issues the plan. Certain states have laws that regulate how a health insurancer prices the plans for certain groups of individuals and do not allow underwriting which can result in higher or lower premiums, usually higher.

Buy down, so far as I know, is when an employer transfers claim liability from existing claims to an insurance company.

Buy up is when, generally, managers and executives protect a greater portion of their income by buying supplemental long term disability insurance coverage at lower rates.
I've never heard of buy up outside disability insurance.

There may be other definitions, but those are the only ones that I'm familiar with.