Healthcare lingo can be difficult to understand, but it is important to know how your health plan works. Knowing the ins and outs of your plan will help avoid unforeseen and costly out-of-pocket charges. Here is everything you need to know about the difference between Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs).
Health Maintenance Organization (HMO):
- HMOs are one of the most common healthcare plans. An HMO requires that you use network providers (doctors, hospitals, and other health care providers) that participate in the same plan. The one and only exception is for emergency care.
- In order to participate in a HMO, you have to choose a Primary Care Physician (PCP). The doctor has to be a participant in the plan in order for you to use them. A PCP is your main doctor, and will be the person that you go to with any health concerns.
- If you want to see a specialist, two steps are required. First you need to get a referral from your PCP, and secondly the specialist that you choose must be in the HMO network.
Preferred Provider Organization (PPO):
- Some people believe that PPO plans are better than HMO, one reason being that you receive more comprehensive benefits.
- It is similar to an HMO plan in the way that there are network providers (doctors, hospitals, etc.) that you can choose from.The difference is that it is not required that you choose from this list of doctors, hospitals, etc.
- The option of choosing non-network providers is there, but it is important to remember that you receive lower benefits and a higher out-of-pocket cost.
- Another difference between HMOs and PPOs is that you do not have to choose a Primary Care Physician (PCP).
- PPOs generally carry a higher premium because they offer a broader network.
Both HMO and PPO plans have advantages and disadvantages. Knowing what exactly you are choosing when looking at health plans is an important step in finding the perfect plan for your employees. Here at Employer Advantage Group, our experts can help you choose the best plan for you. Contact us today!