Health Insurance 101: HMO, POS or PPO?

HMO

Do you know what a HMO plan is? What about a POS or PPO plan? Health plans offered by insurance companies will usually fall into these categories. However, do you know how are they different? If you want to make a smart decision, you need to know their main features.

 

HMO – Health Management Organization

This type of health insurance plan usually limits coverage from health providers under contract with the HMO forming a network of providers. It generally won’t cover out-of-network care except in an emergency. An HMO may require you to live or work in its service area to be eligible for coverage.

HMO’s require that you choose a primary care physician who is responsible for managing and coordinating all of your health care. If you need care from a physician specialist in the network or a diagnostic service such as a lab test or x-ray, your primary care physician (PCP) will have to provide you with a referral.

PPO – Preferred Provider Organization

In a PPO health plan, members get coverage through a network of selected health care providers. However, they can use other providers outside this network for an additional cost. With some plans, there is no need to choose a primary care physician (PCP). If members require specialized care or treatments, usually there is no need for a referral from a PCP. However, for more extensive treatments of expensive care, such as an MRI or CAT scan, prior approval from the PPO may be required.

POS – Point of Service Plan

A POS plan is an “HMO/PPO” hybrid; sometimes referred to as an “open-ended” HMO when offered by an HMO. POS plans resemble HMOs for in-network services. Services received outside of the network are usually reimbursed in a manner similar to conventional indemnity plans (e.g., provider reimbursement based on a fee schedule or usual, customary and reasonable charges).

Now, which plan is best? It all depends. Not every plan fits every individual or family.  What providers are included in the networks offer? Will you be using out-of-network care services? What will your deductible, copays and coinsurance be? (By the way, you may want to check this article to help you decide your health plan as well: 3 Tips for Choosing the Best Health Insurance Plan for You and Your Family) 

If you are looking for health insurance, you can help decide. Contact us! We’ll be happy to help.

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