HMO or PPO?

Are the hurdles worth it? Are there really hurdles?

In today’s health care landscape, many employers have moved to a dual product offering, which consists of both HMO and PPO plans, where the HMO plan is typically offered at a reduced price. Consumers perceive HMOs as a potential benefit takeaway and may choose the more expensive PPO plan option instead. If you are in this boat, I encourage you to make sure this decision is made with all the right facts in mind.

First, HMOs typically are restricted to in-network access only. Here, in the state of Michigan, many carriers contract with all, if not most, of the state’s acute care hospitals. The same access applies to the PPO plans. Access here in Michigan is not a significant issue. The differentiation between the two plans really comes in a couple of ways:

1. PPO plans do allow for out-of-network and/or nationwide access to hospitals and physicians; therefore, if there was a circumstance where you needed to seek a specialized provider out of state, you likely would have access to them at your normal cost-sharing rate.
2. HMO plans have some metrics in place requiring consumers to take additional steps, the main step being the selection of a primary care physician (PCP) and the referral process.

Historically, the PCP referral process was perceived by many as a gatekeeper approach that would limit one’s ability to seek the necessary care. Today, many carriers have loosened their stranglehold on the referral process by offering self-referral and universal referral programs that limit the need to go back to your PCP for all needs.

As they say, “Don’t knock it before you try it.” The HMO plan might be a good selection for you. Just make sure that any providers you routinely see participate within the network and have forward conversations with your physician to understand what processes, if any, will change.

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