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PPO vs. HMO: What should you look for in a quote?

There three basic levels of health care: Indemnity major medical insurance, Preferred Provider Organization (PPO) major medical insurance, and Health Maintenance Organization (HMO). They all have different levels of managed care, different monthly premium costs, different out-of-pocket costs for health care services, and some variances in benefits covered.

With indemnity major medical insurance you can go to any doctor or hospital you want, but at a major cost! When people see the cost they tend to look for something more affordable. Most people choose between the PPO major medical insurance and the HMO health plans.

In our opinion, a PPO is usually the best overall health insurance plan. PPO major medical insurance can cost less per month than an HMO health insurance plan, but you would end up paying more for actual medical services rendered. It is also possible to get a PPO plan where you don't pay too much for medical services, but the monthly insurance premium will be higher than an HMO would be.

So why get PPO major medical insurance? Because of freedom and quality of healthcare. If you need a medical specialist, you can go directly to that specialist and he doesn't have to belong to the same medical group as your family doctor.

Case in point: A person with a tumor had PPO for his health insurance. He was told that the best specialists were in the adjacent county at the university hospital (not part of the same medical group that his family doctor belonged to). He was able to go to those specialists and get the best health care possible; which made a major difference to him.

Another major point is whether the health insurance includes chiropractic health coverage or not. Many HMO plans do not!

With a Health Maintenance Organization (HMO) you have to choose a primary care doctor when you sign up for the insurance. You usually have to be referred to a specialist by your primary care doctor, although some HMO health insurance plans are now allowing a person to "self refer" to a specialist. With most HMO health insurance plans however, the specialist has to belong to the same medical group as the primary care physician.

So why do people want an HMO health insurance plan? The major reason is that they are budget conscious, which is a reality of life. They feel that it's affordable to make the monthly premium payments, but not affordable to pay the lump sum deductible and/or copercentage surprises that may come up with a PPO or other health insurance plan. Also they may feel that the "fleshy growth" that shows up in their body is more likely to be a baby, than a tumor; and so maternity coverage is a major concern for their family and in many cases an HMO health insurance plan has much better maternity coverage!

  1. Do you want maternity coverage?
    HMO's often have better maternity coverage.
  2. Do you want to decide for yourself whether to see a specialist or not?
    A PPO might be better. If you are choosing an HMO, make sure and see which specialists belong to the primary care physician's medical group.
  3. Are you particular as to what doctor you see?
    Would your doctor be available with the plan you choose?
  4. Is alternative healthcare such as chiropractic coverage important to you?
    Many HMO's do not cover chiropractic care.
  5. Where do you live?
    HMO's are often not a available, or have a limited number of doctors available in rural areas.

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