What You Need to Know About HMOs and PPOs

It’s good to have choices. When it comes to health insurance, you have your choice of two types of heath care plans that might be right for you and your family: 1) Health Maintenance Organization (HMO), and 2) Participating Provider Option (PPO). Here’s what you need to know about each option:

What Is an HMO?

An HMO is a type of health plan designed to keep costs low and predictable. HMOs can be more affordable. You’ll have access to certain doctors and hospitals, called your HMO provider network, and your care will be managed by one primary care provider — your personal doctor who helps to make sure you get the right care at the right time and at the right place.

When you and your family use doctors and hospitals in your HMO network, there is no coinsurance, which means you won’t have to pay a percentage of your health care bills. Deductibles and copayments may still apply.

What Makes an HMO a Good Choice?
  • It’s Personal. An HMO is designed so that you have care personalized to you. You’ll have one doctor to take care of you when you get sick or to guide you if you need more care. From helping to manage chronic conditions to helping you when you’re sick or injured, you’ll have someone in your corner who’s making sure you get the care you need.
  • It’s Coordinated. With an HMO, you have a health plan designed to help you stay healthy. Having one health care expert coordinate all of your health care needs keeps your costs down and your health on the right track.
  • It’s Affordable. An HMO is designed to control costs through preventive health care services that can help you avoid serious and costly health problems. You also have predictable costs with an HMO. Most of your expenses include a monthly premium, copays when you go for care and a set deductible for the year.
Four Tips to Help You Get the Most From Your HMO Coverage
  1. See your primary care provider (PCP). When you get sick or have a health problem, call your doctor.
  2. Stay in network. If you visit a doctor who isn’t in your network for anything other than an emergency, you could be responsible for the full cost of your care. It could cost you hundreds or even thousands of dollars in out-of-pocket costs.
  3. Get a referral. Before you visit a specialist, get a referral from your PCP.
  4. Use the ER for emergencies only. If your illness or injury is serious or life-threatening, call 911 or go to the nearest emergency room. You don’t have to stay in network or get a referral if it’s a true emergency — just let your doctor’s office know as soon as possible.

What is a PPO?

PPO stands for Participating Provider Option, or Preferred Provider Organization. It’s a type of health plan that lets you choose where you go for care, without a referral from a primary care provider or having to only use providers in your plan’s provider network. It typically has higher monthly premiums and out-of-pocket costs like copays, coinsurance and deductibles.

Why a PPO may be a good choice for you
  • You don’t need a primary care provider (PCP) to coordinate your care
  • You don’t need a referral to see a specialist
  • You can get care from in-network or out-of-network providers
How do I know if a provider is in my network?

To make sure a provider is in your plan’s network, search your health care insurance company’s provider directory to see the doctors, hospitals and other providers who accept certain health plans. You can search by your plan name to see all the providers in your health plan’s network, or you can search for certain providers you want to use, to see which health plans they accept.

How to Use Your PPO
  • You may need to get pre-authorization (or pre-notification) before getting certain tests or services to receive approval in advance for a particular service. Your doctor’s office will call the pre-authorization number on the back of your health plan identification card to confirm. You can also call before you go for care or to confirm your doctor’s office has gotten the needed authorization.
  • For non-emergencies like a common illness, injury, cold, flu, minor cut or burn, you have a few options to get care. These are less expensive than going to the emergency room.
    • Your health insurance company may have a 24-hour nurse advice line number you can call. Check your health plan identification card for more information.
    • Call your doctor. If the office is closed, call the doctor’s after-hours number. They will either fit you into their schedule or refer you to another doctor or clinic. In some cases, they may have you go to the hospital.
    • Visit a retail health clinic or urgent care center. Call or check online with your health care company first to make sure the facility is in your plan’s network.
  • In an emergency, or when your injury or illness is serious or life-threatening, call 911 or go to the nearest emergency room, even when traveling out-of-state or abroad. You won’t have to pay the higher out-of-network deductible and coinsurance if it is an emergency.
  • For specialist, behavioral health or hospital care, you don’t need a referral from your primary care provider. You also don’t need a referral to visit a hospital. You can get care from an in-network or out-of-network provider, but you’ll likely pay more for non-emergency services if you don’t stay in network.