PPO vs. HMO: Which Health Insurance Plan Should You Choose?

Posted on: 4 September 2017


All Australian residents have access to Medicare, which is the primary health care system. However, research indicates that in addition to this cover, around 57 percent of the residents also take out private insurance. However, in the quest to find additional coverage, very few people understand the complexities of the procedures. Most find themselves stuck between going for preferred provider organizations (PPOs) and health maintenance organizations (HMOs). This article aims at addressing the differences between these two solutions to help you make an informed choice:

Plan Basics

With a PPO, you can visit any health care professional you want, regardless of whether they are inside the plan network. However, finding doctors that are within the network allows you to enjoy discounted services. What's more, you do not need a referral from the primary care physician to see a specialist. This plan offers flexibility in choosing your doctor and the facility from where to seek treatment.

An HMO plan is one where you pick one health care provider who coordinates all your health care services. The doctor maintains or keeps track of all your medical records and offers routine care. However, unlike a PPO plan, this one requires you to have a referral from your primary care physician except in the event of an emergency. Without a referral, the insurance will not cover the cost of the medical care.

Insurance Pricing Structures

PPOs offer great freedom in that you can choose professionals within and from outside the network. However, there is a set deductible that you must meet before insurance starts to make payments, and this makes the option expensive. Also, other variables such as the specialist you see and whether the visit applies to your deductible can also affect the cost of medical treatment.

HMO has a set pricing, and the premiums are lower than a PPO plan.  For in-network covered visits, there is no deductible, and you only pay for a co-pay. However, you must see a professional within the network, and you should also set a primary care provider (PCP). If you choose to see a specialist outside the network or get treatment without a referral from your PCP, you may incur the full cost of the treatment.

Travelling Restrictions

PPO allows you to visit any specialist outside your home area with little or no interruption to your cover. If you travel often, it would be a suitable plan for you as it tends to be more flexible. On the other hand, HMO limits where you can seek treatment, although emergency care can be provided anywhere. If you choose this option, ensure that the there is a provider within your network in the towns that you frequent.

Both PPO and HMO plans have their pros and cons. Your preferred choice should be informed by your financial capabilities, personal needs, and the expected level of flexibility in taking control over your health care.

Contact your preferred provider service for more information and assistance.