Understanding the Difference Between HMO, PPO, and POS
Sunday, March 8th, 2009
Which health insurance plan is best for your small business?
Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), and Point-of-Service Plans (POS) are all types of managed health care. The purpose of managed care is to provide its members with access to a comprehensive system of medical care that offers savings and encourages quality service. While larger companies can afford to offer a choice of health plans, a smaller business can save money by comparing health insurance plans each year before the annual enrollment period. While cost is a key factor, make sure that the network you select provides convenience and coverage in your local area.
Health Maintenance Organizations (HMO)
When your health care coverage is provided by a Health Maintenance Organization, you typically must select an HMO physician to be your primary health care provider. This doctor will coordinate all of your medical care, including referrals to specialists, such as a dermatologist, cardiologist or surgeon. If you choose to seek treatment from a non-network physician, you will generally be required to pay most of the cost yourself. By law, an HMO cannot require referrals for emergency care, so an HMO will pay for emergency room treatment without a referral.
Due to the restriction of choosing from mostly HMO network services, it’s important to check the physician listing and hospital affiliations for the HMO you are considering. If the list is extensive and you are satisfied with the hospitals used by the HMO network, an HMO may be a good choice. On average, HMOs are the least expensive health option for employers and employees. Doctor’s visits, preventive care, and medical treatment are covered by your monthly insurance premium, and there is no individual or family deductible to meet. There is generally a co-payment for each visit that varies based on the type of service provided and the plan you select, but typically no co-insurance. Most standard HMO plans do not have a lifetime maximum benefit amount. Some HMOs are starting to offer more choices in plan configuration, allowing their members to visit preferred providers outside of the network. This gives their members access to an HMO network and a PPO network at the same time, although the PPO portion usually involves deductibles and co-insurance.
Which health insurance plan is best for your small business?
Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), and Point-of-Service Plans (POS) are all types of managed health care. The purpose of managed care is to provide its members with access to a comprehensive system of medical care that offers savings and encourages quality service. While larger companies can afford to offer a choice of health plans, a smaller business can save money by comparing health insurance plans each year before the annual enrollment period. While cost is a key factor, make sure that the network you select provides convenience and coverage in your local area.
Health Maintenance Organizations (HMO)
When your health care coverage is provided by a Health Maintenance Organization, you typically must select an HMO physician to be your primary health care provider. This doctor will coordinate all of your medical care, including referrals to specialists, such as a dermatologist, cardiologist or surgeon. If you choose to seek treatment from a non-network physician, you will generally be required to pay most of the cost yourself. By law, an HMO cannot require referrals for emergency care, so an HMO will pay for emergency room treatment without a referral.
Due to the restriction of choosing from mostly HMO network services, it’s important to check the physician listing and hospital affiliations for the HMO you are considering. If the list is extensive and you are satisfied with the hospitals used by the HMO network, an HMO may be a good choice. On average, HMOs are the least expensive health option for employers and employees. Doctor’s visits, preventive care, and medical treatment are covered by your monthly insurance premium, and there is no individual or family deductible to meet. There is generally a co-payment for each visit that varies based on the type of service provided and the plan you select, but typically no co-insurance. Most standard HMO plans do not have a lifetime maximum benefit amount. Some HMOs are starting to offer more choices in plan configuration, allowing their members to visit preferred providers outside of the network. This gives their members access to an HMO network and a PPO network at the same time, although the PPO portion usually involves deductibles and co-insurance.