When you first choose your health insurance policy, the main decision is choosing between a health maintenance organization (HMO) and a preferred provider organization (PPO). With the HMO, you have managed care through a small number of doctors and healthcare facilities, while the PPO offers you more options, but you are responsible for making a lot of the decisions yourself. If you are thinking about going with the HMO, here are some pros and cons to be aware of.
Pro: Healthcare is Not Pre-Authorized
One of the greater benefits of choosing an HMO is that your healthcare, including treatments for various medical conditions, does not need to be pre-authorized. With a primary care provider (PCP), you need to get authorization from your insurance company before going through certain procedures. However, an HMO is a managed care program, so as long as you go to your PCP first, your diagnosis and treatment is expedited.
Con: Limitations in Choosing a Doctor
On the downside, having an HMO can restrict what doctors and specialists you are able to go to. When you choose your HMO plan, you are also choosing a network of doctors. Only certain doctors and specialists are included in that network, which limits who you get treatment from. If there is an obstetrician who you have heard good things about, but they are not included in your network, your insurance will not cover visits to this obstetrician.
Pro: There Are Lower Deductibles and Premiums
The trade-off for having a limited network of doctors is that you pay less for your health insurance plan. Not only will your deductibles be lower, but your insurance premium is lower as well. Your deductible is an amount of money that must be paid to the insurance company before they start covering your visits, tests, and procedures. With a PPO, a deductible can be thousands of dollars, depending on what policy you chose. You have faster access to coverage with a lower deductible, which is available with an HMO.
Con: Your Out-of-Pocket Costs Are Higher When Traveling
Unfortunately, the limited network of doctors that are covered can be a burden if you travel. You may have chosen a network that isn't necessarily located in other parts of the country. If you travel somewhere that does not have doctors in your network, all your healthcare costs are going to be out-of-pocket. From visits to urgent care to major procedures if you have an injury, the costs can add up fast.
These pros and cons can help you decide if an HMO is the right choice. Also consider the fact that preexisting conditions are covered under an HMO plan, and they might not be covered under a PPO.
For more information, contact Quesenberry Agency For Blue Cross-Blue Shield or a similar company.