As a business owner, you make many important decisions. One of those is deciding which health insurance plan type is the best option for you and your employees. Two of the most popular types of plans you’ll likely consider are Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO).
So, what’s the difference between these two plans? Being able to weigh the pros and cons of each type allows you to make an informed decision about which option meets your needs.
HMO health insurance plans
An HMO plan wins when it comes to cost. HMOs typically have lower premiums and low- or no-cost deductibles. This is beneficial for those looking to budget their healthcare costs. However, the trade-off for these lower costs is a more restrictive network. HMO networks limit coverage to in-network primary care providers (PCPs) as well as restrictions on a certain number of tests, visits and treatments, with some exceptions for emergency care.
Since your plan only covers care from in-network providers, you’ll be responsible for the full cost if you choose to receive care outside the plan’s network. With HMOs, you may also be required to choose a PCP within your network. Your PCP will be your main point of contact for coordinating all of your healthcare needs. They’ll also provide referrals you’ll need to see a specialist.
PPO health insurance plans
A PPO plan wins when it comes to choice and flexibility. Unlike HMOs, PPOs typically have higher monthly premiums and a deductible. You’re responsible for paying the full cost of the medical services you use until you meet the plan’s deductible. However, PPOs provide fewer restrictions on out-of-network options, expanding the list of doctors and hospitals you can visit.
While PPOs do provide some coverage for out-of-network care, you’ll likely have to pay more. It benefits your wallet to stay in network, but knowing you can see a PCP or go to a hospital outside of your network and receive some coverage provides fewer limits and restrictions. With a PPO plan, you’re also able to see a specialist without needing a referral from a PCP.
Here is a table summarizing the key features between HMO and PPO plans:
|
| HMO | PPO |
Plan Networks | Access to a network of doctors, hospitals and other healthcare providers |
Yes |
Yes |
Primary Care Providers | Ability to see the doctor you want without needing a PCP to authorize treatment |
No |
Yes |
Referrals | Referral from a PCP not needed to see a specialist |
No |
Yes |
Costs | Low or no deductible and generally lower premiums |
Yes |
No |
Coverage for Out-Of-Network Care | Coverage for medical expenses outside the plan’s network |
No |
Possibly |
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Medical Mutual offers the ChamberHealth® program in partnership with the Cincinnati Chamber to provide members with premium health insurance coverage. If you’re a business owner interested in an affordable health insurance plan, specialty products and wellness programs, consider enrolling in ChamberHealth® today. For more information on ChamberHealth® through Medical Mutual, request to chat with our dedicated Sales representative and we’ll walk you through your options.
Choosing the right plan type can meet the health and financial needs of you, your employees and your business. With any plan, check the provider network to see if your preferred providers are in the plan’s network. Medical Mutual is here to help you find the right plan to support your team’s well-being while giving your business the flexibility and value it needs.
This content is provided by Medical Mutual and is for educational purposes only. Eligibility and coverage are subject to the specific terms of your benefit plan.