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PPO and HMO Networks
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HMO: Health Maintenance Organization - PPO: Preferred Provider Organization HMO
First let me say many clients "think" that an HMO plan is less expensive. This is WRONG. An HMO plan is more expensive, a lot more "money" in monthly premium. Here are the features of an HMO plan. * Benefits are you only pay co-pays and usually there are no deductibles. * Premiums are higher much higher! * The physician network is much smaller than a PPO network and you are very limited. * If you need a "certain physician" "the odds" are low that they will be in the HMO network * There usually are NO "out of network" benefits The best features of an HMO are: there is NO deductible, and has more detailed and defined benefits. Your insurance broker can go over the plans available in your market, "line by line".
The best feature is also the worst feature of the HMO and that is there is no deductible. Because there is no deductible the monthly premiums are extremely high. It is not uncommon for a family to pay a $1,000 or more a month in premiums for an HMO. This goes back to doing the math when it comes to buying insurance. If your someone who goes to the doctor once or twice a year the HMO plan is absolutely the wrong plan for you to be in, because you are pre-paying for something that may or may not happen. This actually is the same scenario of buying the $500 deductible paying a really high premium because you are trying to hedge against something that may not happen. Yes, with an HMO you won’t have any out of pocket medical cost during the year . . . that’s because you will be paying it every month in the premium. PPO This is the network where you belong!Here are the features of a PPO plan: * Broad network of Physicians which usually includes 90% of all health care facilities available * There is a deductible, and it varies from $500-$5000 (usually) * There are benefits that are covered in an HMO but not a PPO (Mental Health, Chiropractic for example, see your local broker for line by line benefits) * There are "out of network benefits" I prefer a PPO plan for my clients because I would not want any of them to be "left out in the cold" if they needed "that certain top specialist in their market." The key here is to stay within your monthly budget. When it comes to and HMO or PPO I feel the PPO is the better option! However there are good HMO's nationwide, and they are good for a reason! Your broker will advise you on everything you need to know!
The PPO plan gives you the option of designing a plan around the deductible, co-pays, and co-insurance that meets your budget and still gives you great flexibility in the doctors you want to see. Because PPO’s have hospitals, clinics, and doctors from all networks you can see doctors from different associations without having to have a referral.
