Over the past few months, you’ve probably experienced some kind of changes. For many, especially those who lost their job or health insurance coverage, one of these changes may have been your first ever look at health insurance that didn’t come from an employer. Understandably, it may be a confusing time, but if you’re venturing out on your own, we’re here to help.
Following our last discussion on the different ‘metal’ levels and how they affect cost sharing and deductibles, we would today like to focus on the different insurance networks. Though this may be more familiar than the different categories you may find on the marketplace, it’s going to be a decision that affects not only your choice of doctor, but your premiums as well. In fact, these three simple letters say a lot about your coverage.
Two Main Types of Network: HMO and PPO
Especially if you’ve ended up having to go out alone after losing your job, one of the things you likely already understand is whether you had an HMO or PPO before you left. Though other options do exist, namely Exclusive Provider Organization and Point of Service Health Plans, the most common types of health plans available to you are Health Maintenance Organization and Preferred Provider Organization.
Available as part of the marketplace plans and short-term health plans, as well as the natural continuation you’d get under COBRA coverage, these make up networks of doctors that you can work with, the opportunity to work with specialists and out-of-network doctors, and the process in which you gain access to doctors.
Health Maintenance Organization (HMO)
Often featuring lower premiums than its counterparts, an HMO, according to Healthcare.gov, is a type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO. It generally won’t cover out-of-network care except in an emergency. An HMO may require you to live or work in its service area to be eligible for coverage. HMOs often provide integrated care and focus on prevention and wellness.
These are among the most common plans available, and are known by the following:
- It Starts with a Primary Care Provider: In general, with an HMO, your first step to any form of care is to speak with your primary care provider (PCP), who will in turn refer you to any specialist.
- Smaller Network of Doctors and Hospitals: For routine or specialist care, HMOs will limit you to a somewhat small network of doctors and hospitals who will provide care.
- Potentially Limited Number of Tests and Treatments: Along with a smaller network of providers, you also are likely to have fewer testing options. Additionally, you will need to jump through a few more hoops to get care with an HMO.
- Lower Premiums: While the negatives may seem overwhelming, relatively healthy individuals who don’t need to see specialists will often save money.
Preferred Provider Organization (PPO)
A plan that offers a broader network of providers, a PPO is defined by healthcare.gov as a type of health plan that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. You can use doctors, hospitals, and providers outside of the network for an additional cost.
- Can Often See Providers without a Referral: With a PPO, you have more access to specialists and other providers and can gain access to these without a referral.
- Services (when in network) Receive Preferred Rate: If a provider is in network, you can receive the service for a preferred rate.
- A Bigger Network: In addition to common providers, PPOs often include independent providers and hospitals who are not included in HMO plans.
- You can go out of network (for a cost): PPOs also allow you to visit doctors that aren’t in your PPO network, but you’ll be responsible for more of the cost. For instance, your PPO may have an entirely separate deductible and out-of-pocket maximum for out-of-network medical professionals.
- Higher Premiums: With additional access and flexibility comes additional monthly cost. These plans do deliver you more options when you need them, and often are incredibly beneficial to people with a major disease or chronic illness.
Many Options—Which is Best for You?
Especially if you haven’t done this before and have relied on employer coverage, this may be the first time you can choose between having an HMO or PPO. So which one is best? Depends on what you need. Both HMOs and PPOs offer their own benefits, and depending on the amount of care you need to receive, one may be better than the other.
Either way you look at it, you do have options. Whether you are eligible to enroll as a result of lost coverage, need to apply under the emergency Qualifying Life Event, need COBRA, or are seeking short-term health coverage, it pays to have someone in your corner who knows how to help.
Shopping for insurance used to be confusing and time-consuming. But with the help of our national network of licensed brokers, it doesn’t have to be. Insurance Broker Hub has helped over 10,000 consumers find the coverage they need at a price they can afford.
Our free service gives you access to an independent network of national brokers who have the experience and expertise to design a plan around your needs and budget. Ready to get started? Simply request a no obligation health insurance quote here.