Small Business Group Insurance Plans
HMO (Health Maintenance Organization Plans) vs. PPO (Preferred Provider Organization Plans)
A health maintenance organization (HMO) and a preferred provider organization (PPO) have several differences. Often the PPO will cost a little more because it provides greater flexibility in choosing doctors and seeing specialists than the HMO.
With a PPO, one can choose any doctor or any hospital, usually within a preferred network of providers. Depending upon the terms of coverage, a doctor or hospital outside the preferred provider list will cost more. On the other hand, an HMO requires one see only doctors or hospitals on their list of providers.
In contrast to the HMO, the PPO allows one to see any doctor one wishes. One does not have to designate a primary care physician, and one can usually see any specialist without referral. The PPO offers choice and flexibility, but is often more expensive.
Most PPOs have a wider preferred provider list than the HMO provider list. Usually, seeing someone on the list means less expense. In fact, the PPO basically has an HMO component and network built into it.
Selecting either an HMO or PPO should be based on a full understanding of the types of coverage offered and the costs for each. Our description of factors involved in deciding on a plan, The Right Plan, is helpful in understanding how these plans work.
Employees are usually given the choice between either an HMO or a PPO. Depending upon one’s health needs, and income level, the PPO may ultimately be a better choice because it does provide access to a greater number of doctors and facilities.
There are many companies that provide group insurance. Most business owners don’t have the time or inclination to spend the many hours trying to sort out the best plan for their companies. It is best to engage the services of an experienced insurance agent who has the ability and the expertise to research the many group plans available in the market and find the one that is suitable to your needs and budget.