The USA medical insurance system is traditionally divided into four Medicare Advantage plans. Among those, two plans are most widespread. They are known as HMO and PPO. Though these plans are a part of big insurance coverage, they still have important differences. They are connected with the patient’s right to choose the doctor. It can be done either through referral or without it.
The key point of the HMO plan requires obligatory beneficiaries’ visits to healthcare providers, doctors and hospitals. It must be done inside the network policy system. The only exception is for urgent cases. Patients may go outside the system. In this case, beneficiaries tended to pay more for medical services. This plan is known as HMO-POS (HMO – Point-of-Service). On the one hand, it lets the patient receive necessary medical aid. On the other hand, it is always connected with additional expenses.
In comparison with HMO, PPO has a bit of a different principle. Beneficiaries can use providers out of the network. Besides, they can visit a specialist without a referral. This plan doesn’t require it.
HMO induces beneficiaries to choose a primary care physician. At the same time, PPO doesn’t have such a rule. In general, they have one common feature for all the patients. Both plans include prescription drug coverage. It is realized through a Medicare Advantage Prescription Drug plan.
What is a medical network?
A network is a group of medical providers. They sign a contract for providing healthcare insurance policies with discounts. When the patient enrols on the program, he can hope for some benefits. This network usually includes general practitioners and some other specialists. It may also include some laboratories, X-ray services and medical equipment. The patient needs to understand all preferences of every Medicare plan.
What is Medicare HMO?
HMO plan implies choosing a primary care physician. It must be done before enrolling in the main HMO plans. The doctor must refer the patient to a certain specialist. Some services can be used without a referral. It includes various yearly medical procedures.
Drug prescription is included in many plans. It is provided by Medicare Advantage Prescription Drug plans. If the patient wants to receive drugs from Medicare coverage, he must check the options of the plan. Not all drugs must be on the list.
As for the primary care doctor, there are no dangers here. If the physician goes out of the system, the patient will be informed about it. The patient must choose another doctor inside the network. The main thing about the HMO plan is the network. While signing the agreement on this plan, the patient is ready to get medical aid inside the system. The only exclusion here is urgent cases and emergencies. It doesn’t mean that the patients have no right to get help out of the plan. In general, there are no restrictions. At the same time, it raises some additional expenses.
Key features of PPO
In comparison with HMO, the beneficiaries of PPO don’t need to choose a physician for a referral. It is the main difference with HMO. The patient can consult doctors straightforwardly. With this plan, providers give more flexibility to the patients.
Using the PPO plan, you will save up some money if you apply to the doctor inside the network. Yet, the patient has a chance to get medical service outside the network. It includes additional expenses for copayment and coinsurance.
One of the key factors, for the PPO plan, is direct medical aid. In other words, the patient doesn’t need to visit a physician for a referral. One can get necessary medical help directly from a certain doctor. This feature must be taken into account while choosing the right plan.
As for drug prescription, it is almost the same as the HMO plan. One can receive Medicare prescription drug coverage via the PPO plan. Nevertheless, not every plan includes all the drug prescriptions. There can be different payments and benefits from every plan.
What is provided by every plan? The main distinctions
- The first thing about HMO is the obligatory visit to the primary care physician. If the doctor can’t solve the problem, the patient will be sent to the specialist inside the network.
- In comparison with HMO, the PPO plan doesn’t include such a requirement.
- HMO plan implies staying inside the network to get special coverage.
- PPO plan provides the chance to leave the medical network. The patients may apply to the doctors outside the system and still have some benefits.
The main recommendation for the patient is to stay inside the HMO plan if he wants to get the largest coverage. If the patient decides to leave the plan, it means that all the benefits will disappear. With the help of PPO coverage care, the patient is free of his choice. He can choose the doctor wherever he wants. No matter what doctor the patient chooses, he can still get some coverage. It will be undoubtedly lower than in the first plan, but it is still available.
The medical costs of the plan
Another distinction includes the premiums. PPO guarantees a larger monthly premium. HMO offers lower premiums inside the program. The average sum of premiums of the first type of care coverage is about $517. HMO offers $427 as a monthly premium.
At the same time, personal payments for HMO are lower than for PPO. The latter plan often includes deductibles, coinsurance or copays. Everything depends on a certain plan. If the plan includes only copays, it will be performed the same way as HMO plans. The patient pays a fixed sum during the service. There is another situation with the deductible with coinsurance. The patient will have to pay a percentage for services until the deductible is being completed. When it is over, the patient may need to pay some more money during the service.
In fact, everything comes to the following conclusion: if you need lower premiums and expenses, it is reasonable to choose an HMO plan. If the patient is interested in various ways of getting help, it will be important to choose a PPO plan.
What services are included in the care coverage?
Everything depends on the plan. As a result, the services can be really different. The general policy includes preventive care services. It comprises regular check-ups, emergencies and urgent cases and maternity care. These are the main features included in every plan.
One more difference is connected with payments. HMO patients doesn’t need to ask for a claim. The insurance company will send the sum directly to the healthcare provider. PPO coverage looks a bit different. First of all, the patient may need to pay a certain sum. After that, he can ask for a claim to compensate for the expenses.
Getting a prescription with a plan
The same situation is connected with getting a drug prescription. HMO patients must get the prescription inside the care system to get the coverage. PPO provides the opportunity to get a drug prescription at any place. So, there is another disadvantage. The result of such freedom may lead to extra costs.
Dental aid is realized with the same principles. The compensation with DHMO (Dental Health Maintenance Organization) can be provided only inside the medical network. It leads to lower costs than having DPPO (Dental Preferred Provider Organization). As a rule, DHMO doesn’t have coverage outside the system.
How to enroll in the plan?
No matter what type of plan the patient is going to choose, there are some general rules. It includes two periods known as the Open Enrollment Period (OPE) and Annual Election Period (AEP). The first policy is for individual healthcare holders. The second package is for Medicare enrollees.
It can look like this:
- The plan’s registration is open since the 1st of November. It is available for viewing and enrollment as an OPE.
- The last day for changes and choosing the coverage is the 15th of December.
- The policy usually starts working on the 1st of January of the following year.
At the same time, some states may change these dates.
The situation with Medicare enrollees is a bit different.
AEP traditionally opens on the 15th of October. During this period, the client can change the plan from Original Medicare coverage to a Medicare Advantage. The last chance to make changes in the Medicare plan’s coverage is the 7th of December. After that period, all the changes can’t be applied. The New Medicare policy starts working on the 1st of January of the following year. Since the date, the client may go from Medicare Advantage to Original policy.
HMO and PPO coverages are quite popular on the healthcare market. According to the statistics, the majority chooses PPO. It is connected with the freedom of choice. Sometimes it is necessary to get qualified medical aid outside the system. HMO plans won’t provide such an opportunity. The chance exists, but the copayment will turn into a big sum. PPO plan is more favourable in this case.
Drug prescription is also easier to get inside the second plan. At least, the patient may go to any drugstore with the prescription. There are some advantages of using the latter plan with dental problems.
While applying to the insurance provider, the patient must understand all the features of every policy. Everything will depend on the patients’ needs. It is especially important with a drug prescription because some of the medicine can’t be included in the coverage. The sum of compensation also plays an important part. The sum can vary with $100 per month. Yet, within a year it can turn into a thousand dollars.