When it comes to employee benefits packages, you do not want to choose your health insurance hastily. As one of the most essential benefits, it is important to compare and contrast your options to ensure that you make the right decision. Two of the most common types of health insurance include “Preferred Provider Organization” (PPO) plans and “Health Maintenance Organization” (HMO) plans. Learn more about these health insurance options, the differences between them, and who the ideal candidate is.
PPO Health Insurance
Available in the individual and family market, PPO insurance plans are one of the most popular types of health insurance policies. Under a PPO plan, members are able to visit any in-network physician or healthcare provider they desire without getting a referral from a primary care physician (PCP). PPO plan members are encouraged to use a network of preferred doctors who are covered at a higher benefit level than out-of-network healthcare providers. You may also be responsible for an annual deductible that must be paid before the insurance company will begin covering your medical bills. PPO plan members may also have a co-payment of between $10 and $30 for some services.
PPOs are a type of managed care health plan that follow certain rules to keep costs down. Costs are kept to a minimum by limiting healthcare services to procedures and visits that are medically necessary, including preventive care. They also limit where and who you can see for healthcare service. By negotiating discounts from certain healthcare providers and medical facilities, members can receive quality healthcare at a lower cost. A PPO plan uses cost-sharing to help keep costs low which requires members to pay partly for services through coinsurance, deductibles, and copayments.
There are some distinct differences between PPO and HMO health insurance. PPOs generally have higher monthly premiums that are provided in exchange for more flexibility to use both in-network and out-of-network providers without a referral. However, visiting an out-of-network healthcare provider will often result in a higher fee and a separate deductible. In certain cases, members may also be required to pay a provider for services directly. They can then file a claim with the insurance company to be reimbursed. This is most common when visiting out-of-network healthcare providers.
A PPO health insurance plan may be right for your organization under certain circumstances. PPO health plans are best suited for people who want the flexibility to pick nearly any healthcare provider or medical facility for their health needs. A PPO plan may also be preferable if you want a portion of all out-of-network claims to be covered by your insurance company. Finally, a PPO plan is an excellent option for people who do not want to have to get referrals from their PCP before visiting a specialist. If you have employees who want to keep their existing doctor or medical team who are not in-network, PPO health insurance may be the right choice.
HMO Health Insurance
An HMO health insurance plan delivers health insurance to members through a network of healthcare providers and medical facilities. Most members of an HMO have their own primary care doctor to manage their care. Members will also have to see their PCP for referrals to see specialists. Although an HMO offers less freedom to choose healthcare providers, it also results in the least amount of paperwork compared to other plan options. As the name suggests, HMOs have a main focus of keeping their members healthy. They aim to prevent illness through preventive services to avoid larger medical costs later on.
In addition to having to have a primary care physician and get a referral to see specialists, members of HMO plans must also use in-network providers if they want optimal coverage. Fortunately, most networks offer a wide range of providers including doctors, specialist, hospitals, pharmacies, x-ray facilities, labs, and speech therapists. If you choose to see a doctor or visit a hospital that is out-of-network, you may be stuck paying the entire bill yourself. It is the responsibility of plan members to know which providers accept their insurance plan and which do not.
There are several exceptions to the requirement for members to remain in-network. If your reason for visiting an out-of-network healthcare provider is considered a true emergency, it will generally be covered by the insurance company. Out-of-network health services may also be covered if the HMO does not have the specialty service that a member requires. However, this rarely occurs. Another exception to this rule applies to members who are undergoing a complex course of specialty treatments. If the provider is not part of the HMO, the insurance company may decide to let you finish the course of treatment with your current healthcare provider.
While there are many variations of HMO plans, most enable members to maintain lower out-of-pocket healthcare expenses compared to other options. Members are not required to pay a deductible before coverage begins and co-payments are usually minimal. Members are also not generally required to submit any of their own claims to the insurance company. An HMO plan is best suited for people who desire a health plan with low premiums and no deductible. It is also a good option for individuals who do not mind having an out-of-pocket limit. People who require preventive care services like regular checkups and immunizations should also consider an HMO.
Learn More About PPO & HMO Health Insurance
When it comes to health insurance, there is no one-size-fits-all solution. It is important to consider your budget and unique needs before choosing a plan that best fits your organization’s objectives. The biggest difference between PPO and HMO health insurance is the way out-of-network care is handled. However, the two options are very similar in other ways which can make it a difficult decision. To learn more about PPO or HMO insurance or for assistance choosing the best health insurance for your company, contact the experienced benefits consultants at BBG Broker today.