I’m currently considering purchasing my own individual health insurance. I have HMO and PPO on top of my list. Can anyone help me sort out the differences between the two in terms of coverage, monthly premium, deductible and out-of-pocket maximum?
With regards to an HMO, medical providers are generally limited to those that have contractual agreement with the HMO. Services rendered which are covered by HMO individual health insurance are conducted under authorized HMO personal care physicians (PCP), hospitals, and or laboratories. If you choose an out-of-network medical provider, the HMO may not be liable for certain expenses of these. Thus, you may have to bear the entire cost for those services. A PPO, however, has a more flexible coverage of service. Their policy holders are generally allowed to use the services of any physicians, specialists, and hospitals they want. In terms of coverage, HMO is somewhat more restrictive compared to a PPO. Regarding premiums, an HMO is usually lower than that of a PPO, due to the total control the HMO has on the patient’s care. As for drug coverage, HMOs usually have a prescribed list of drugs. They also have a maximum drug benefit in a year ($600 to $1000 a year). This is likely to be low compared to what PPOs have to offer which are usually higher and sometimes limitless. Nevertheless, the PPO will charge higher copays for this benefit. It is a good idea then that if you are healthy or has no health problems at all then go for an HMO, since this is more affordable. Otherwise you may have to choose PPO that has a much better coverage, higher deductible and reasonable out-of-pocket expense maximums. Answer by Moderator - June 16, 2009 @ 2:55 pm No CommentsNo comments yet. Leave a comment |
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HMO (Health Maintenance Organization) and PPO (Preferred Provider Organization) are what you call managed care plans. That is, if you got sick or will need medical services or prescriptions these types of providers cover these expenses through specialists, hospitals, laboratories and other medical facilities that are affiliated with them.
