HMO Plans (& HMO vs PPO)

HMO Plans (& HMO vs PPO)

It is a common misconception that HMO plans are the only type of plans that cover routine care such as wellness checkups and preventative services. That is generally no longer the case. Since the advent of the Affordable Care Act (ACA), all ACA-compliant plans including Preferred Provider Organization (PPO), Point of Service (POS) plans , etc. are required to offer coverage for physicals and preventive services as part of the law's Minimum Essential Coverage (MEC) requirement.

It is true that the monthly premiums and out-of-pocket costs for additional physician visits and lab tests can sometimes be lower with HMO's than other types of plans with larger provider networks.

HMO's also do require an insured to select a primary care physician (PCP), who would be responsible for all of the routine medical care and referring the insured, if necessary, to any specialty care doctors. Keep in mind that there will be little to no coverage offered for medical services provided by physicians and hospitals outside of the HMO, other than for emergency care.

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Health maintenance organization (HMO)
Preferred provider organization (PPO)
How much will the plan cost?
Lower cost
HMO plans typically have lower monthly premiums and out of pocket expenses.
Higher cost
PPOs usually have higher monthly premiums in exchange for the flexibility to use medical providers both in and out of network without a referral. Out-of-pocket medical costs can also run higher with a PPO plan.
Do I have to use a primary care physician (PCP)?
With most HMO plans, most virtually all medical services are coordinated by your PCP (primary care physician).
PPO plans do not require referrals for medical services.
Do I have to get referrals to visits a specialist doctor?
With an HMO, you must first schedule an appointment with your PCP and he or she will provide a referral to an in-network specialist.
PPO plans do not require referrals for any services
If I have a doctor or a specialist who is out of network, will I still be able to see him or her and have the costs covered?
HMOs don’t offer coverage for care from out-of-network healthcare providers. The only exception is for medical emergencies.
With a PPO, you have the flexibility to visit providers outside of the network. However, visiting an out-of-network provider will include a higher cost share/ copay.
Will I need to file claims?
Since HMOs only allow you to visit in-network providers, it’s probably that you’ll rarely have to file a claim. The insurance company pays the provider directly.
In some cases, you will have to pay a doctor for services directly and then file a claim to get reimbursed. This is most likely to be the case only when you seek services from out-of-network providers.
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