Factors To Consider When Deciding Between HMO And PPO Health Care Plans

Factors To Consider When Deciding Between HMO And PPO Health Care Plans
by: Christine O'Kelly



Faced with ever-increasing medical costs, selecting the best health plan
for you and your family requires informed decision-making on your part.
There are two basic forms of employer sponsored health care plans: HMO &
PPO. Both of them have distinct advantages and disadvantages that you
must be aware of in order to be able to make the best decision possible.

Families without a health plan receive far less preventative health care
and very often, they are not diagnosed with a disease until it reaches
later, less treatable stages. Compounding the problem, individuals
without a health insurance plan, even after diagnosis, receive less
treatment. Studies have shown that approximately 18,000 people die each
year from inadequate medical care. Studies also show that individuals
without a health care plan are hospitalized 30-50% more often for
avoidable conditions. With an average emergency room visit costing
$3,300, the investment in a health insurance is clearly worthwhile.

Managed Health Care Benefits

Managed health care plans reduce medical costs to enrollees, allowing
them to receive medical care that they might not otherwise be able to
afford without a medical plan. Health insurance companies develop
contracts with health care providers, promising to provide specific
doctors and hospitals with more business through their health insurance.
In return, doctors and hospitals agree to provide those services at a
lower cost.

HMOs and PPOs are both managed health care plans that reduce the cost of
medical treatment by combining contributions of enrollees and gaining the
benefits of scale. There are other medical plan mechanisms put into place
to reduce medical costs by encouraging such incentives as preventative
care, enforcing limitations to coverage and increased beneficiary cost
sharing. Each health care plan has advantages and disadvantages that must
be considered. There are significant price, service, and flexibility
differences between these two types of medical plans. Whichever medical
plan you select, you will be able to receive more medical care for far
less money than if you had no insurance at all.

HMOs Are An Inexpensive Option

HMOs, or Health Maintenance Organizations, are health plans characterized
as cooperatives of doctors, hospitals, and other medical providers. HMOs
such as Kaiser Permanente and Aetna are your least expensive and most
restrictive health care plan. Under HMO policies, health insurance
providers have agreed to provide their services at fixed prices and
copayments are generally very low. Since health care providers receive
less money for their services, they tend to see as many patients as
possible.

There are many rules covering HMO medical plan services, the most
important one being the requirement that your physician be a member of
the HMO. If you need to see a specialist, you must see your primary
physician for a referral. HMOs focus primarily upon preventative health
care services such as immunizations and physicals. HMO doctors are paid
on a per office visit basis.

PPOs Cost More And Provide More

PPOs, or Preferred Provider Organizations, are health care plans that
have contracts with insurance companies to reduce medical expenses to
enrollees. PPOs like Blue Cross Blue Shield are more expensive than HMOs,
but you have much more freedom about who you see. Referrals are not
needed to see a specialist, but your medical plan will require that you
pay more to see a doctor that is not a member of the PPO medical plan.

Enrolling in a PPO provides you with more control over your health care
plan as well as greater autonomy. Unlike HMOs, emergency room visits are
generally covered under PPO medical plans. PPO doctors are paid on a
retainer basis, thereby providing them with no incentive to unnecessarily
prolong treatment.

One aspect of a managed health care plan is that treatments are reviewed
by the insurer. In some cases, this can eliminate unnecessary procedures
and overcharging, thereby saving both the insurer and enrollees' time and
money. Whichever coverage you select, you will provide your family with
access to the benefits of regular, preventative care and early diagnosis
of more serious conditions, increasing the likelihood of recovery. Eat
right, stay fit, and enroll in a health care plan!






About The Author
Christine O'Kelly is a contributor writer for Health Insurance Finders.
She conducts in depth research on topics such as HMO Health Insurance
Plans http://www.healthinsurancefinders.com/hmo_plans.html and PPO Personal
Health Insurance
http://www.healthinsurancefinders.com/ppo_plans.html.




Visit the author's web site at: http://www.healthinsurancefinders.com