What is the Difference Between an HMO and a PPO?
Posted on November 28, 2014
Health insurance companies often use terms and acronyms that many of us don’t understand. The focus of this article is to explain the difference between an HMO and a PPO.
HMO
HMO stands for “Health Maintenance Organization.” The majority of our Health New England members have an HMO plan. In an HMO, you can only see healthcare providers who are in the Health New England provider network. We have a broad network of providers that should easily cover your needs. HMOs cost less because all providers are contracted with Health New England. Generally, providers outside of the network will not be covered. There are times when members have special issues and get permission from Health New England to be treated by an out of network provider. For example, if you have a complex medical issue that really needs the expertise of a Boston hospital, Health New England will make sure that you get the care you need, even though Boston hospitals are out of our network. Our goal is to get you the right care, in the right place, at the right time!
An HMO plan usually requires a referral from your Primary Care Physician (PCP) to see a specialist. This is to make sure your PCP knows what care you are receiving. In an HMO plan, your PCP is responsible for managing your all of your care. GOOD NEWS… Health New England did away with this rule! Health New England’s HMO members, for the most part, can make appointments directly with specialists who are part of Health New England’s provider network.
PPO
PPO stands for “Preferred Provider Organization.” In a PPO, you can see providers outside of Health New England’s network. The care you receive from these providers will be covered at a lower benefit level. PPO members pay higher premiums for this increased flexibility. People who choose PPOs often travel frequently and want to be able to see out-of-network providers when away from home. Some just prefer that their healthcare choices are unlimited. If this appeals to you, check to see if your employer offers a PPO plan.
Why are HMOs so much more popular in western MA?
Many employers don’t offer PPO plans because…
- Health New England’s extensive network of providers can cover all employees’ healthcare needs the majority of the time.
- PPO plans are more expensive to employers and employees.
- When offered, only a very small portion of employees actually choose them.
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