| If you are searching for an individual health | | | | deductible can meaningfully reduce your medical |
| insurance plan, you will undoubtedly encounter | | | | costs in a scenario where you are in need of |
| both Health Maintenance Organizations (HMOs) and | | | | significant medical care. HMOs will typically have a |
| Preferred Provider Organizations (PPOs). | | | | small co-payment for both doctor visits and |
| Both HMOs and PPOs are types of "managed | | | | prescription drugs. |
| care" insurance. Managed care plans are | | | | Preferred Provider Organizations (PPOs) |
| structured around concept of a network, which | | | | PPOs are offer greater flexibility in terms of |
| refers to a group of doctors, hospitals, and other | | | | patient care, but have a higher cost when |
| healthcare providers. | | | | compared with HMOs. |
| Now that the definitions are out of the way, let's | | | | You may have a general physician under a PPO |
| look at the differences between an HMO and PPO. | | | | plan, but the plan does not require a referral prior |
| Health Maintenance Organizations (HMOs) | | | | seeking the attention of a specialist. In addition, |
| HMOs are offer good care at a low cost. | | | | PPOs provide some insurance coverage for |
| Under an HMO plan, healthcare is provided by | | | | out-of-network doctor visits, which are not |
| doctors who are members of the HMO network. | | | | covered at all in an HMO plan. |
| From a coverage standpoint, the defining feature | | | | The increased range of options associated with a |
| of an HMO is the concept of a primary care | | | | PPO leads these plans to be somewhat more |
| physician. This doctor is the primary point of | | | | expensive relative to HMOs. These higher costs |
| contact for all medical needs, and is required to | | | | come in the form of higher deductibles, as well as |
| provide a referral prior to patients seeing a | | | | higher co-payments. |
| specialist. While this referral system is in place to | | | | Bottom Line |
| more efficiently manage costs, limits your | | | | When looking for individual health insurance, both |
| flexibility to see a specialist directly. | | | | HMOs and PPOs are good coverage alternatives. |
| From a cost perspective, HMOs are more | | | | To minimize costs, go with an HMO. To maximize |
| affordable relative to PPOs. They generally carry | | | | choices, sign up for a PPO. |
| a very low deductible, if any at all. A low | | | | |