How HMOs and PPOs Differ

Health insurance is a great thing for us to have. It helps cover the cost of otherwise expensive medical bills in exchange for monthly payments to your insurance provider. However, not all insurance policies are the same!

There are cheaper policies, more expensive policies, HMO/PPO/EPO policies, and many other variations of them. Among the many benefits of a PPO plan and choosing an out-of-network provider, two significant benefits are:

• The ability to get an appointment quickly
• An out of network provider can negotiate costs, resulting in a cheaper out-of-pocket amount for your visit

Typically when an individual is looking for a doctor to tend to their injury or ailment they can be confused when they are told that their doctor of choice isn’t “in their network.” What does this mean? Well, it all depends on whether you have an HMO insurance plan or a PPO insurance plan. An EPO plan is sort of in between the two and will be discussed further at a later date. Below we’ll list the differences between an HMO insurance policy and a PPO insurance policy.

Which health care providers can be chosen?

HMO: You must choose doctors, hospitals, and other providers in the HMO health insurance network.

PPO: You can choose doctors, hospitals, and other providers in contract with your PPO health insurance policy. A PPO Insurance plan gives you the flexibility to choose your own specialist. You can either contact your provider and request a list of doctors in your network, or you can use a provider search tool like PPO Nexus.

Is a Primary Care Physician (PCP) Needed??

HMO: Yes, your HMO will not provide coverage if you do not have a PCP.

PPO: No, you can receive care from any doctor you choose.

Can a Specialist be Seen?

HMO: You will need a referral from your PCP to see a specialist (such as a cardiologist or surgeon) except in emergency situations. Your PCP also must refer you to a specialist who is in the HMO network.

PPO: You do not need a referral to see a specialist.

Who is responsible for healthcare claims?

HMO: All of the providers in the HMO network are required to file a claim to get paid. You do not have to file a claim, and your provider may not charge you directly or send you a bill.

PPO: If you get your healthcare from a network provider you usually do not need to file a claim.

What Charges are Associated with In-Network Physicians?

HMO: The only charges you should incur for in-network services are co-payments for doctor’s visits and other services such as procedures and prescriptions.

PPO: In most PPO networks you will only be responsible for the copayment.

What Charges are Associated with Out-of-Network Physicians?

HMO: Except for certain types of care that may not be available from a network provider, you are not covered for any out-of-network services.

PPO: If you choose to go outside the PPO network for your care, you will need to pay the provider and then get reimbursed by the PPO. Most likely, you will have to pay an annual deductible and coinsurance.