A Side-by-Side Comparison of Two Popular Plans
The HMO Plan
There are several types of insurance plans out there, but it is up to you to decide which plan is best for your family and for your budget. An HMO is probably the most popular kind of plan.
The Advantages of an HMO
With this plan you have several advantages:
- The out of pocket cost is minimal; you pay a set amount each month. With HMOs, there generally is not a maximum monetary amount you can use. This option is best, especially if you have severe problems in your family history, such as heart attacks or stroke.
- With some HMOs, they focus on your well being. They look at it as, if I offer my clients gym memberships, and health classes, the chances of problems with obesity and high cholesterol decrease.
The Disadvantages of an HMO
- If you have an accident, you are required to seek treatment from someone in your provider group. If treatment is sought outside of this group, you usually have to pay for this out of pocket.
- You have to choose a Primary Care Physician. If you have been seeing a doctor for years and he or she is not in your HMOs group, you are required to pick someone from their list.
- If you have an emergency outside of your health care area, your HMO may give you problems with payment. Most of the time, an HMO is very particular about the term emergency, and what they consider to be a true emergency.
All in all, if you are a family whose budget is tight, an HMO is probably the way to go.
The PPO Plan
With a PPO plan, members usually pay in advance for medical care and are reimbursed their money less co-payment fees from their insurer. With this type of insurance, there are several advantages and disadvantages.
Advantages of a PPO
- There is an out of pocket price cap. Meaning, you only have to pay a certain amount before it is capped; usually it is around 1000 dollars for individuals and around 2000 dollars for families. This way, if your child is sick and needs medical care, you know that you do not have to pay anymore than 2000 dollars toward his or her care.
- The freedom to choose. With a PPO, you are not necessarily required to choose a doctor in the health care group, but to save your pocket some pain, it is recommended. With some plans, they will pay for more of your care if you choose a doctor in their group, leaving you a smaller balance. If you choose an out of group doctor, you will be paying higher out of pocket costs.
Disadvantages of a PPO
- Higher out of pocket costs. You could be required to meet a deductible and generally have a higher co-pay cost than with an HMO.
- Be prepared for paperwork! With a PPO, you are going to be required to fill out paperwork to receive reimbursement from your insurer.
Both options have advantages and disadvantages that you have to choose from and see which is best for you and your family.