by Tom Snow

HMO PPO What Does that Mean to Me?


By now, you know or have heard discussions on how our healthcare system is changing.   People whohave been buying healthcare are trying to figure out what this new system looks like, while others who have not purchased healthcare in the past or have been uninsured for a very long time are now potential buyers because of Health Care Reform.

With so much change upon us, it is important to remember that some terms are not changing.  It is often that these items require the most attention.  This is especially true if you are a “new” consumer of healthcare.  The terms PPO* and HMO** are common terms today and will remain in the future.

Buyers need to understand that when purchasing healthcare they will most likely be purchasing a plan that has a PPO or HMO network.  The simplest way to explain these terms is that they dictate which doctors, hospitals and pharmacies you can go to.  PPO’s typically offer more choice.  HMO’s tend to be more restrictive which is not a bad thing, but is critical to know before purchasing coverage.

As a consumer you really need to pay attention to this and make sure what you’re buying includes the doctors and specialists you want to see.  People I have been talking to are more focused on price, because they are not aware of this important piece of the buying decision.

My goal is not to tout one vs. the other because I believe that each serve a purpose and both have pro’s and con’s, but as people are making these buying decisions it is important for them to understand what they are buying.  When they need to use their health plan it should provide adequate options for doctors, hospitals, or pharmacies.

*PPO: an organization providing health care that gives economic incentives to the individual purchaser of a health-care contract to patronize certain physicians, laboratories, and hospitals which agree to supervision and reduced fees—called also preferred provider organization;

**HMO: an organization that provides comprehensive health care to voluntarily enrolled individuals and families in a particular geographic area by member physicians with limited referral to outside specialists and that is financed by fixed periodic payments determined in advance—called also health maintenance organization;

 

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