What's the difference between HMO and PPO?

Question

I am planning to buy health insurance for myself. So can someone tell me the difference between HMO and PPO?
Also, which is better in terms of coverage, annual premium, annual deductable and annual Out of Pocket Maximum?

Answer 1

HMO stands for "heatlh maintenance organization".
PPO stands for "preferred provider organization".
With an HMO, you chose your PCP (personal care physician) from a network of physicians who have joined the HMO. For referrals, the PCP has to submit an authorization request to the HMO which approves (or denies) all referrals to specialists, all tests done outside the PCP's office and all elective hospitalizations and surgeries. Referrals are only to other physicians and hospitals who have signed up as providers for the HMO.
A PPO does not require a referral. You can go to any physician, any specialist, any hospital whenever you want. Physicians who have signed agreements with the PPO plan will be paid according to the agreement rate. The patient will get a reduced patient share if they choose a physician who has a signed agreement with the plan. But if the patient chooses a physician or hospital not on the plan, the insurance will still pay but the patient share .
(copayment) and/or deductible will be higher.
Premiums are much lower for an HMO than for a PPO because the HMO has complete control over the patient's care.
As far as precription coverage goes, HMOs have a list of approved drugs. Many also have an annual maximum for drug benefits which is often quite low (usually $600 to $1000 a year). PPOs may charge higher copays, but their annual drug maximum is significantly higher, sometimes no maximum at all.
Bottom line, if you're rarely sick choose the HMO.
If you need good coverage and can afford the deductibles and the copays, PPO will get you better care.

Answer 2

With an HMO you only have certain amount of PCP's to choose from. With PPO you can pretty much chose what doctor you want to see if they accept PPO's. Terms of coverage wise... PPO will have a better annual deductable and out of pocket. might be a bit more expensive tho.

Answer 3

HMOs require referrals to see a MD other than a family physician. PPOs allow you to choose your own MDs in or out of network , but you may be asked to pay up to 80 % of surgical bills. The cost rise for PPOs isn't even an issue if you have or expect medical problems in the future. Also with an HMO you usually go to a clinic such as mayo or kelsey siebold etc.

Answer 4

HMO: Health Maintence Organization- In plain english means- a bunch of doctors and administrators (called a IPA) who have negotiated to receive payment for each person that signs up. Example a person signs up for a HMO the and pays lets say $100.00, the doctor receives $40.00 per month immediately. So you wonder what happens if the patient never sees the doctor does he/she refund the money?.. Nope..just collected as profits, this type of arrangement is called Capitation, or pre-paying the Doctor (or IPA) for services. (the argument with HMOs is that the doctor has allready collected the premium and is not motivated to order more diagnostics in order to save money) I tell people look at a HMO like a Buffet, would you pre-pay for a month of lunch buffet, when some days you just feel like eating an apple and a glass of water. The people who make out are the big eaters, same thing with HMO's the people who make out are the sick folks, or those utlizing services. Now HMO's have some big advantages for employee's who don't want to receive extra costs or co-insurance costs for diagnostics or in most cases Hopsitalization is little or no costs. Historically Employees enjoy HMO benefits, especially low those with young families, and middle to low income.

PPO Plans, You can visit any Physician who is within the Participating Organization of physicians and receive pre-negotiated prices for services. With this type of plan Doctors are not pre-paid they are paid based on services that are performed on patients, the arguement with PPO plans is that doctors are motivated to run as many test as possible to make more money. With a PPO plan remember Co-insurance needs to be paid- so if you have a 500. deductible and you have met your deductible, you will still need to pay co-insurance normally it is 30%, always check to see what the max. out of pocket is, this is the max. you will pay for seeing doctors within a network!.

Happy Shopping, remember educating yourself on health insurance makes you a more informed consumer.

Answer 5

I do believe that HMO is your company provides doctors for you and PPO is where you can choose your own doctor. as far as terms of coverage you should read what annual premium covers , what annual deductable covers and annual out of pocket maximum covers. With my insurance i have PPO and the only thing i know is that we have a co pay of 20 for every doctors visit and the insurance pays the rest

Answer 6

Usually the PPO costs more, allows you to choose doctors with less restriction.

Answer 7

does UnitedHealth haxe both hmo and ppo