HMO stands for Health Maintenance Organization that offers and provides health care plans and insurance coverage for various payment structures ranging from monthly to yearly.
PPO vs HMO
PPO or preferred provider organization is a plan where subscribers get discounted and reduced rates for health care services and facilities. In contrast, HMO or health maintenance organizations do not offer reduced rates.
In the case of PPO, subscribers can use the services of any provider inside and outside their networks. But in the case of HMO, subscribers can only receive benefits from pre-determined and assigned providers.
PPOs are the oldest and most popular option, whereas HMOs are relatively new and less popular.
In the case of PPO, you may select doctors outside of their network at a higher cost, but in the case of HMOs, you may need to pay for doctors outside your network.
Why avail HMO services? What are the Advantages and Disadvantages of HMO?
Here are some advantages of HMOs:
Higher quality of care.
Fixed payments based on contract (Monthly or annually)
Lesser co-pays and out-of-pocket costs.
Less complicated compared to other policies.
No limits on primary care visits.
Reduced drug costs
Here are some disadvantages of HMOs:
Referrals are needed
A limited selection of specialists.