PPO vs HMO

Insurance carriers on the individual side usually offer more PPO options.  PPO health insurance plans offer consumers the choice of going to any provider in the network without having to get a referral for the service.  HMOs have you assigned a primary care physician and all your medical services have to be referred through him or her. 

Another great perk of going the PPO route is also getting out of network coverage.  Most plans, although coverage is less, will allow you to go out of network and still receive some help from the health insurance carriers.  Carriers such as Anthem Blue Cross and Blue Shield have many PPO health insurance plans to choose from.  However, a great way to save money is to go with Kaiser and their HMO options.  They are the largest HMO provider in California and have some less expensive alternatives to the PPO options.

Here are the basics of each type of plan:

PPO - A preferred provider organization (PPO) is a network of health care providers that have contracted with the network management organization and have agreed to provide services for certain price and delivery parameters. These negotiated rates are intended to give consumers the buying power of larger groups. Unlike HMOs, PPOs allow plan participants to go outside the network and still receive coverage, although the benefits will be more limited out-of-network.

HMO - A health maintenance organization (HMO) is a managed care organization that consists of a management organization and of medical providers that have agreed to provide care for members on pre-arranged financial terms. HMOs typically will be the lower cost option for the employees and the employer. This is because the HMO typically restricts the doctors a patient can see to those in the provider network.