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HMO vs PPO Health Insurance

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What is the Difference Between HMO & PPO?

With an HMO plan, you pick one primary care physician. All your health care services go through that doctor. That means that you need a referral before you can see any other health care professional (except in an emergency). Visits to health care professionals outside of your network typically aren’t covered by your insurance.

PPO plans give you flexibility. You don’t need a primary care physician. You can go to any health care professional you want without a referral—inside or outside of your network.

Staying inside your network means smaller copays and full coverage. If you choose to go outside your network, you’ll have higher out-of-pocket costs, and not all services may be covered.

Which Healthcare Providers Can I Choose?

With a HMO plan, you must choose doctors, hospitals, and other providers in the HMO network. With a PPO plan, you can choose doctors, hospitals, and other providers from the PPO network or from out-of-network. If you choose an out-of-network provider, you most likely will pay more.

Do I Need To Have a Primary Care Physician (PCP)?

With a HMO, you must have a PCP to receive coverage. If you choose a PPO, you are free to choose any doctor you want. However, if the doctors you choose are not “preferred” providers, it will cost you more.

What If I Need a Specialist?

With a HMO, except in emergencies, you must have a referral from your PCP to see a specialist. Note: The specialist must be in the HMO network.

As a member of a PPO plan, you do not need a referral to see a specialist. Be aware, some specialists will only accept patients who are referred to them by a PCP. In addition, some PPOs require that you have prior approval for specific services, such as CAT scans.

Do I Need to File an Insurance Claim?

With a HMO, you do not have to file a claim – the providers in the HMO network file a claim for payment – you are not charged by your provider.

With a PPO plan, if you receive services from a network provider, you usually do not need to file a claim. However, if you go out of network for services, you may have to pay the provider the entire bill, then file a claim with the PPO to get reimbursed. In addition, you are responsible for any part of the doctor’s bill not covered by the PPO.

How Do I Pay for Services Out of the Network?

With an HMO, you are not covered for any out-of-network services (there may be exceptions for certain types of care that may be unavailable from a network provider).

Under a PPO plan, if you receive services outside the PPO network, you must pay the provider and then submit a claim to get reimbursed by the PPO.

How Do I Pay For Services in the Network?

With an HMO, the only charges you pay for in-network services are copayments for doctor’s visits and other services such as procedures and prescriptions.

Under a PPO plan, you are generally responsible for the copayment (note: some PPOs have an annual deductible for any services, in-or out-of-network).

Which is Right for Me?

Choosing the right health insurance for your needs depends on your individual preferences. If you prefer to have your care coordinated through a single doctor, HMO insurance may be the right choice. If you want greater flexibility or if you see a lot of specialists, PPO insurance may be the best fit.

Questions about HMO vs. PPO or other health insurance questions?

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