HMO or PPO? Understanding Plan Types with Short Term Health Insurance
Choosing the right short term health insurance policy may seem complicated thanks to the wide variety of options available. It’s important to understand the terms when you’re shopping so you can compare plans correctly. Do you know the difference between an HMO and a PPO? You might have seen these abbreviations before. These and other letters refer to a health insurance policy’s plan type. Major medical coverage and short term policies alike come in different types, giving you greater flexibility in choosing the kind of plan that fits your needs and budget. To buy the right plan for you, you’ll need to know the difference between the plan types.
Health maintenance organizations (HMOs) require you to get care within a defined network of providers. These plans don’t typically cover any services or treatments that you get outside of that network unless it’s for a true emergency. You’ll also probably need to have a primary care doctor with an HMO, who you’ll need to ask for referrals if you want to see a specialist.
Thanks to the strict network limitations of HMOs, these plans tend to cost less than other plan types, so if you’re okay with a tight network and the providers it covers, an HMO can save you money while covering your medical bills.
Preferred provider organizations, a.k.a. PPOs, are flexible plans that allow you to choose medical providers within a specific network or go outside the network (which costs more). While you don’t need a referral from a primary care physician to see a specialist, you may have to pay more to see a provider outside of the network. This flexibility in obtaining care from the provider of your choice often comes at a cost of higher premiums and deductibles. You’ll may also have to complete paperwork to get reimbursed for a portion of your expenses if you see a provider outside of the network.
PPOs are a good choice if you don’t want to get a referral to see a specialist, or if you want more freedom to choose your medical care provider even if he’s not in your network.
Exclusive provider organizations (EPOs) require you to see providers within the plan’s network, but you typically have more options than with an HMO. However, these plans are similar to PPOs in that you don’t need a referral to see a specialist within the network. One drawback is that you won’t be covered for any services that you receive outside of the network. You may have to cover copays and deductibles out of your own pocket for these services.
EPOs could be good if you don’t mind a limited selection of healthcare providers in exchange for lower premiums than you’d get with a PPO.
Point-of-service health plans combine some of the features of HMOs and PPOs. You’ll most likely have to choose a primary care physician within a network of providers who’ll coordinate your care. You’ll also need to get a referral to see a specialist, but you can see someone out of the network for additional cost. As with PPOs, you may have to complete paperwork to be reimbursed for a portion of any visits to providers outside of the network.
POS plans are a good choice if you want a primary care doctor to coordinate your care with a bit of flexibility and lower premiums.
Choosing Your Plan
You’ll want to explore your options before buying your short term healthcare policy to determine which level of care will most suit your needs. But it’s important to remember that temporary health plans are meant to provide coverage for the unexpected. PPOs are very popular for those who want more control over who they can see to receive their medical care, while HMOs are a better choice for those who want to get the most care for their dollars and don’t mind remaining in a network. Short term policies tend to be HMOs because this plan type keeps costs down, but if you’ve got access to different plan types, take the time to shop around. As with any kind of health insurance coverage, you should choose the policy that fits your needs and budget.