Open enrollment is looming, and in a few months, the window for setting up your 2021 health insurance plan will be open.
For those looking for a new plan, it’s paramount that you get to grips with the different options available to you. You should also begin to gather the necessary documents for the application.
By taking these steps, you’ll make the process smooth and relativity effortless. Furthermore, you’ll be able to make the most informed decision rather than falling for coverage with the most enticing premiums.
Below we will explore the differences between managed health insurance plans such as an HMO and a PPO. After reading this article, you’ll have learned each plan’s positives and negatives, allowing you to decide which one is most suitable for you.
Managed Health Insurance
There are two main health insurance organization plans. These are the HMO (Health Maintenance Organization) and PPO (Prefered Provider Organization). Each offers you a different package of services and has varying restrictions.
HMO
An HMO plan guarantees a level of health insurance for a vast amount of services through a PCP (Primary Care Provider). However, you’re restricted to using only in-network physicians and other professionals through a PCP referral. You’ll be expected to pay copayments, but they are much lower than under PPO insurance.
PPO
PPO plans allow you to visit any professional you desire in-network or out. With this type of cover, you’ll get a level of insurance coverage depending on the medical service. Some procedures may not be covered at all by an HMO if they are not deemed medically necessary.
Furthermore, the freedom to seek these services and visit any professional will also bump up your premiums and deductibles. With this being said, PPO plans are perfect for people who travel and can’t access a PCP.
The Pros and Cons of HMO
An essential factor of HMO plans is that it’s your responsibility to select a PCP. There are positives and negatives to having a set PCP.
Visiting a single professional allows you and them to build a trusting relationship. They’ll also have a greater awareness of your medical background and lifestyle, therefore, allowing your health to be tracked more accurately.
A sole professional can manage and coordinate your healthcare more effectively in comparison to if you met with a different professional on every visit to the doctors.
Using a PCP will also keep copayment costs down. The network has fixed prices attached to medical services in agreement with your insurance.
On the other hand, if your current preferred physician isn’t within your new HMO network, you’ll have to change doctors. Furthermore, if you need specialist treatment, you must get a PCP referral, meaning there may be a delay in receiving this care.
Another negative to having to use a PCP is that you’re restricted. If you travel often, you’re at risk of having to receive medical attention that isn’t covered by your insurance because you can’t access your PCP.
The Pros and Cons of PPO
PPO plans give you freedom of choice. Unlike HMO plans, there’s no need to worry about if your current physician is in the network. You can keep seeing them regardless and still receive a level of cover for your insurance. Choosing a physician and other professional that isn’t in the network is more expensive, and the price tag for these visits can vary widely.
You can also independently book specialist appointments without a referral. However, you could rack up a hefty bill that may not be covered by your insurance by doing this. It’s always best practice to consult your physician first and check with your insurance as to what is covered by your policy.
Furthermore, with a PPO plan traveling away from home doesn’t have to be a concern. For those that travel for work or go on regular holidays, a PPO is a safe option to ensure you receive insurance covered care even when you’re outside of the city or state.
The biggest negative for taking out a PPO is the deductibles. Many average households will be deterred by the fact that they are often unset and high. Moreover, you may also have to pay them and copayments before your insurance pays out their share of the bill.
In Summary
Generally speaking, HMO is much cheaper than PPO. The lower premiums and copayments are due to the restrictive nature of the plan. By only using network approved professionals means your bills are kept in control. If you spend more time at home than away and are working on a budget, then HMO is an excellent choice for you.
PPO is far less restrictive than HMO. It gives you the freedom to go and see whatever you like wherever you want. The privilege does come at the cost of higher premiums, copayments, and deductibles, however. You’ll also run the risk of varying charges for services. A PPO plan is the right choice for anyone who spends more time away than they do at home.
Now that you’ve learned what HMO and PPO insurance entails, consider your lifestyle and budget to determine which one will suit you best. Think about the positive and negative when making your application this open enrollment.
