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The #TRN team continues our mission to take the confusion out of health insurance shopping. In this round, we tackle your questions surrounding PPOs, HMOs, and the basics of health insurance networks.
We recommend a three-step plan to simplify your healthcare shopping process:
Learn how the healthcare system categorizes its various offerings.
Outline the type and level of support you (and any dependents, if applicable) anticipate needing from your healthcare providers in the coming plan year.
Using these pieces of information, take some time to compare plans against each other and narrow down the options that will work best for you.
This post will focus on Step 1 and the differences between HMOs, PPOs, and other managed care insurance plans. For a deeper dive into other aspects of your health insurance selection process, also be sure to check out:
Our complete breakdown of the Healthcare Marketplace's metal tier system
Our top tips for finding the right health insurance plan for your family
Other things to consider before you finalize a health insurance policy
HMOs, PPOs, and More: Terms to Know
The key to understanding HMOs, PPOs, and other health insurance plan structures is to look at the trade-off they offer you. Generally speaking, the more control you want or need in selecting your service providers, the more expensive the plan.
Before we dive into the direct comparison of these offerings, let's first nail down the definitions for a few of the essential terms we'll see along the way.
Provider Network
A provider network is a predetermined list or group of doctors, healthcare providers, and facilities a health insurance carrier has contracted with to provide services to its members. When you purchase a healthcare policy through an insurance carrier, you can access this pre-approved network of service providers through your plan.
In-Network
The term "in-network" refers to those service providers your insurance carrier has added to your insurance plan's provider network. Keep in mind that provider networks can vary based on your insurance carrier and policy features.
Out-of-Network
On the flip side, the doctors, healthcare providers, and facilities not included in your pre-approved provider network are referred to as "out-of-network."
What is an HMO?
An HMO, or Health Maintenance Organization, is a plan type that generally focuses on preventative care and wellness.
HMOs: Think "Low Cost, Less Control"
The good news: HMOs tend to be less expensive than PPO plans. The trade-off? They also tend to be more restrictive about the providers (physicians, specialists) you can see while seeking coverage. With an HMO, you can expect all of your services and care plans to be coordinated by your Primary Care Physician (PCP), who will work on when specialist referrals are needed and to whom you'll be referred. And if you choose to see a care provider outside the designated HMO "network," you may be footing the entire bill for it unless it's deemed a medical emergency by your carrier.
An HMO can limit the providers you can access. This plan may be best suited for an individual who might need a regular checkup or other general preventative care but is less likely to need specialized services.
What is a PPO?
A PPO, or Planned Provider Organization, on the other hand, offers more flexibility for the healthcare service seeker.
PPOs: Think "Higher Cost, More Control"
The good news: PPOs tend to allow more choices and broader networks of allowable care providers. PPO plan holders are not required to obtain a referral from a Primary Care Physician before consulting with a specialist. And even if you choose a provider outside your network, your PPO may kick in for some cost-sharing that an HMO wouldn't. The trade-off? Prepare to pay more for a PPO than you would for an HMO.
The PPO's higher price tag offers more options for individuals and families. This type of plan may be best suited for individuals who anticipate needing specialized care or want as much of a voice as possible in building their team of experts and service providers.
What is an EPO?
An EPO, or Exclusive Provider Organization, strikes a middle ground between an HMO and a PPO.
EPOs: Think "Mid-Range Cost, Some Control"
The good news: EPOs offer an alternative option if you like the features of a PPO but would prefer a lower price tag. The cost of EPOs falls between HMOs and PPOsreflectingts a medium level of control over care options. With an EPO, a plan holder isn't required to obtain a referral before seeing a specialist and can coordinate a care team of their choosing without working through a Primary Care Physician. The trade-off: while PPOs may pay a portion of out-of-network expenses, an EPO (like the HMO) will not pay for any part of out-of-network expenses unless the insurance carrier deems it a medical emergency.
An EPO may be best suited for someone willing to stick to an insurance carrier's predetermined provider network but will also pay a little more for the flexibility to seek specialist care or consults beyond general preventative care.
Consult with an Expert
Still trying to figure out the right managed care plan for you? We get it. Health insurance is one of the most complex topics out there today. Even if you understand healthcare networks and how they apply to your situation, there are many other factors to consider before you finalize your plan.
Luckily, you don't have to do this alone.
We're not health insurance agents; we're the matchmakers who are passionate about connecting consumers with the experts you can trust. When you work with a licensed health insurance agent committed to understanding and educating their clients, you can receive guidance tailored to your situation and needs. And if you need help finding an agent you can trust, that's our specialty.
Find out how to secure the coverage you need for your healthiest life.
Want to be a guest blogger with the #TRN Team? We are looking for writers to contribute. Reach out to jo@trustedreferral.org to get started.