Whats an HMO and a PPO?
A. HMO is short for health maintenance organization. These plans are usually inexpensive: You pay a flat monthly fee and perhaps a small co-pay on each visit, but they generally carry little or no deductible. Meaning, you don’t have to rack up $1,000 in medical bills before insurance coverage kicks in. An HMO will cover you from the start. However, you can only choose a doctor who participates in the plan or else you’ll have to pay for the visit out of your own pocket. And if you ever want to see a specialist, you have to get permission from your primary care doctor. The only exception is for visits to an OB/GYN or an emergency situation. If you’re young and in good health, an HMO might be a good – and inexpensive – choice for you. (Learn more about HMOs.) PPO is short for preferred provider organization. These typically cost more than an HMO and may carry a deductible but, in return, you get more flexibility in your choice of doctors. You’re still encouraged to see doctors within the
