What is Better.... HMO or PPO?

Question

I recently got a new job where they have two options for insurance. An HMO and PPO. I'm wondering what is the difference really, bottom line. The HMO is cheaper, and has a smaller copay. But does being able to pick from a list of Doctors better than having one that refers you? Help, I've never had insurance through a company before.

Answer 1

PPO's allow you to go to whom ever you want for what ever reason.  HMOs you have to get permission for anything that is not preventative care typically.

Father had an HMO when he had open heart surgery (Quad Bi-pass Emergency Surgery).  About 2 weeks after he had the surgery they gave him permission to have it.  Had he waited, he would have died.  Had they not approved it, he would have lost god knows what to pay the bills.  Had it been a PPO, neither of those would be an issue.

Answer 2

You would think that a PPO plan would better.  However, unless it REALLY matters to ou to be able to pick your doctor, economically the HMO is FAR better.  My work recently eliminated all HMO plan options, and now a good percentage of us can't afford to go to the doctor!!  HMOs cover cost REALLY well.  You just have to be aware that you're going to wait a while in the office for non-emergency and referrals... I miss my HMO financially :(

Answer 3

Chances are you are young with few health issues. If you have a doctor that you see (usually a Family Practice-type doctor and he is on the HMO list as a Primary Care doctor or even as a specialist-go with the HMO. It will cost you less in both premiums and out of pocket expenses. If you see a specialist for any type of chronic or on-going illness, the PPO is the way to go. It will cost you more, but you will not have to start over with a new doctor.

Answer 4

The PPO approach got started when the indemnity insurance companies saw the success that HMO's were having with cost control.  With an HMO, you generally need to see your primary caregiver first. He or she then either treats you or refers you to an appropriate specialist, depending on your issues and their knowledge.  A PPO has a "preferred provider" that may be in your financial interest to see, but the plan allows you the option of going straight to a specialist, usually at a greatly increased cost.  For most people, there really wouldn't be a difference.  You go to the doc for treatment, they collect their co-pay, treat you, and send you on your merry way.  If money is the issue, go with the lower co-pay and premium.  If flexibility is more important, go to the PPO, but only if you think you know enough to take advantage of the flexibility implied.