What is the difference between a PPO and HMO?

This is an important difference to understand. If your healthcare options include the choice between an HMO and a PPO, you will need to determine whether or not your trusted doctors participate and, if not, if you will be able to afford your share of their fee if you opt for a PPO. Some women feel the value of continuity, using a doctor they have seen for years, provides more secure diagnoses. In that case, you could pay for outside of network medical care. Be sure you know what each system offers so you can estimate your actual healthcare costs.

A health maintenance organization (HMO) and a preferred provider organization (PPO) are both managed care plans. A managed care plan is a method of paying for and providing health care for a set fee using a network of hospitals, doctors, and other health-care professionals. The managed care plan monitors (and sometimes limits) the care that its doctors provide to members. Its goal is to ensure that unnecessary and expensive services to its members are minimized.

HMOs are the most popular form of managed care. Here, all health services and financing go through one organization. Services include inpatient and outpatient care and prescription drug benefits. The HMO offers a network of hospitals and health-care professionals that its members must use. These health-care professionals are either employed by or under contract to the HMO. Members pay a monthly fee that does not change (unless, for example, the entire fee structure changes annually) regardless of the care they may need. Paper work for claiming the fee for the service is done by the provider (doctor) or by PCP.

PPOs are far less restrictive than HMOs. A PPO consists of a group of hospitals and health-care professionals who agree to provide care to members at a reduced cost. A PPO is designed to provide affordable health care while maintaining flexibility for its members, who do not have to use the services within the network but are encouraged to do so. Staying within the network means that their costs are lower. If members go outside the network, they are still covered but must pay a higher deductible and contribute a higher co-payment. The policy holder has to claim from the insurance company for reimbursement. Apart from this there are other plans in PPO:

• Beneficial Plans - Offers you a chance to waive deductibles,
• Beneficial Rx Plan - Same as the Beneficial Plans in waiving deductibles, and also offers lowers costs on prescriptions.
• Preferred Plan - You can choose the medical provider, plus the monthly bill you pay on this plan is quite reasonable.
• Traditional Plan - You can choose your own medical provider and the rate on this is not costly
• Plus Plan - You pay a reasonable rate here and get lower out-of-pocket expenses as well.
• Health Savings Account - You pay a high deductible, but are exempted from tax on serious health expenses.