The Costs And Benefits Of Hmos And Ppos

By Author: Norris Rios
Total Articles: 572
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When insurance companies get together with lawyers, the result is policy documents difficult to understand. Are insurers being dishonest? Well, think about marketing in general. The point of ads is usually to sell you a product before you have tried it. With food, you can see a brand name and decide to taste it. Seconds later, you know whether you like it or not. No matter what promises were made, the reality is quickly tested. With something like insurance, you actually buy the policy hoping you will never have to taste it. Let's be honest. Even with a health plan, no-one wants to get injured or fall ill. So unlike the food, there's no quick test. You have to wait until forced through the claims procedure. Then you find out what all the jargon really means and whether you got good value. So, yes, there is some dishonesty. But, if you learn a little of the jargon, you can see which plans work the best for you.

A Health Maintenance Organization (HMO) is a network of physicians and healthcare service providers. They are likely to be for-profit and are looking for a guaranteed volume of business. As a group, they contract ...
... with insurance companies to sell their services at fixed prices for each process or procedure. Because the insurer ties its policy holders to this network, the volume of business is guaranteed so, in return, the prices agreed are lower than for individual patients. This is a slightly Faustian deal. You pay less as a premium, copayments are low and deductibles often not required. But you have no real control over the quality of the service you receive. All the decisions are taken by your Primary Care Physician. You can ask for particular referrals, but the PCP will always have the final say. Worse, all the doctors in the network have a quota to meet. It's therefore like a production line in a factory. You stand in a queue, see the doctor for the minimum time, have the standard treatment given to you and then you are out. It's cheap but basic healthcare.

A Preferred Provider Organization (PPO) also sees the creation of a network that contracts with insurance companies but this is a more flexible deal. You pay more as a premium, the copayments tend to be higher, you pay for more of your own drugs, and there are deductibles. But you have the right to choose which doctors to see and which facilities to use. People who prefer to be treated as human beings and have the additional money opt for a PPO. In fact, if you want to see a doctor outside the network, this is allowed and you can claim up to the standard fee payable to a networked doctor. So you either save money or pay the additional amount out of your own pocket.

The decision between an HMO and PPO comes down to what you can afford and the level of personal service you prefer. Health insurance quotes in the private sector include both options. The same choice has to be made in the plans offered by many employers. That means reading the plans to see what each covers. Always get the maximum number of health insurance quotes before you buy.