Decisions, Decisions…..HMO or PPO?
Two types of health insurance plans are well known, and one of the two is often the plan of choice for savvy insurance shoppers. One type is known as a Health Maintenance Organization (HMO), and the other is called a Preferred Provider Organization (PPO). Shopping for insurance requires careful consumers to become familiar with these two plan types at a minimum.
Health Maintenance Organizations
HMOs often have lower premiums than other sorts of health care plans, but in exchange for the better rates, the policyholder agrees to be limited to in-network physicians. In-network hospitals are also less numerous, and the specialists in any given field are usually very few in number indeed.
Health care professionals, whether primary care physicians or specialists, are approached by the HMO and offered a flat rate for each service rendered to members of the HMO. The health insurance company can bargain for very competitive rates since all their policyholders will use their selected provider for that service and they typically aim at boosting the patient lists of doctors and hospitals since anyone in the pool of covered individuals will contact someone in the network for their health care needs.
Most HMOs require the insured to pay both a co-payment and a deductible before seeing a health care provider, thus helping the company to control costs. Some such companies also mandate approval from their representatives before any procedure is performed to be sure that the customer is staying with network providers and that the procedure in question is covered. If the procedure was carried out before approval was granted and the insurance company then denied coverage, the individual would be left to cover the entire cost out-of-pocket.
Preferred Provider Networks
A Preferred Provider Organization, or PPO, is unlike an HMO in that it offers the insured a choice in of doctors and hospitals for treatment. PPOs usually employ a two-tier system of in-network providers and out-of-network ones. Visits to a health care provider within the network is covered at a higher rate than those to someone out of the network.
As PPO-based policies offer a greater degree of choice, they are naturally more expensive than HMO policies. PPOs allow patients to choose the provider they would like to see, while HMOs reserve that choice for company representatives. Budgetary constraints may affect the suitability of PPO plans, since the company does give consumers more leeway to make their own decisions.
An individual’s choice of health insurance coverage is dependent on several factors, including the importance that person places on being able to select a doctor. Both HMOs and PPOs have positive characteristics. Insurance shoppers must be diligent in comparing the features of all available plans before settling on a final choice.
From dental and vision coverage to maternity and prescription drugs, add-ons to insurance policies can add real value if the coverage is needed. Finding out exactly what each add-on covers is a first step in deciding whether that feature is worth paying for.
Dental–Fear of pain is not the thing that keeps patients away from the dentist; cost is. One of the most added optional features in the health insurance field is dental coverage. This one feature is likely to be added even if the insured needs no other add-ons.
Dental plans often cover medically necessary oral surgery. High-dollar cosmetic procedures, on the other hand, are usually considered voluntary and are not covered. Dental coverage is not mandatory, but it can be a great help when the insured breaks a tooth or needs orthodontic care.
Vision–The one most underrated add-on offered by most health insurance companies is vision insurance. Only in cases where corrective lenses are already in use is vision coverage usually selected. This is false economy, however, since most vision plans cover an annual screening that can detect eye problems before they become expensive major issues.
Life–Achieving security means planning for the unexpected. The grief of losing a loved one is compounded if adequate financial preparations are not made. Life insurance is one add-on that assures the future of dependent survivors by allowing beneficiaries to collect a set amount when the insured passes away.
The point of life insurance is to pay some of the expenses incurred when the insured dies. Larger plans are available that helps assure the financial security of survivors. Most plans are quite inexpensive considering the degree of financial security they offer.
Maternity–Some health insurance policies cover maternity care, but most do not. This coverage is of no use to families without women of childbearing age, and is of most value to those planning to add to their families in the near future. If a pregnancy is anticipated at any point, it is best to confer with an insurance agent about add-on maternity coverage and the possibility of adding it once a pregnancy has been discovered.
Prescriptions–Anyone who takes medication for a chronic condition understands the need for prescription drug coverage. Those who have it often pay twenty dollars or less for their medication, but patients without a prescription add-on pay the full cost themselves, which may reach into the hundreds of dollars. Even generic medication can have a huge price tag; prescription drug coverage is something everyone should have.
The extras that can be added to individual health coverage have one characteristic in common: patients are better off if they have them when they are needed rather than not having them at all. A good health insurance provider is an invaluable resource in answering questions about add-ons and in tailoring an insurance plan to fit specific needs.