HMO vs PPO Comparison
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When comparing HMO vs PPO plans, you have to figure out the differences of how they work. There are some subtle but important differences between the two types of plans that make a huge difference in how much they will cost you both in premiums and in out of pocket expenses as well as differences in they health care choices they will give you.
An HMO or Health Maintenance Organization is one type of managed care network. It is usually made up of main hospitals operated by the HMO or exclusively contracted with the HMO and affiliated specialists, diagnostic and outpatient facilities, and general practitioners know as primary care physicians.
HMO networks manage care by keeping their clients in a tight network. It works like this: You choose a primary care physician that is in the network. You then have to go through them for referrals to specialists and hospital stays, and these also have to be in the HMO network. By keeping everything in network, you have less choice about your medical care but you will enjoy lower monthly premiums and lower out of pocket costs.
PPO networks operate quite differently. They accept providers that agree to accept lower payments by the insurance companies in return for being able to accept the plans for that particular PPO. In return, it expands their customer base. You as a customer will also have a lot more choice. You can switch doctors easily, and you can see any doctor outside of the network, but when you see the doctors out of network, you will have to pay more out of pocket. The plans cost more, but you have the freedom of choice.
I know that this has been presented in rather simple terms, but these are the differences, cost vs choice when looking at HMO vs PPO plans.
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