#31 | Posted by eberly
Here is the main difference between HMOs and PPO plans.
HMOs pay your primary care physician a capitation payment every month whether you use care or not. It is up to you Primary Care physician to manage your care each year within those capitation payments.
That is why you have a "Gatekeeper" for your medical groups in the form of a primary care physician.
With PPO Plans you can go to your own doctor of choice (a misnomer) but it WILL cost you more through your deductible. Just two years ago private insurance companies were offering PPO Plans with reasonable deductibles but now most affordable plans have a minimum of a $1,000 deductible. What the insurance industry does not tell you is they have done studies that determined that on average people will spend about $1,200 per year in actual medical care.
See the hook? You pay your premium, plus your deductible and except for major illnesses the private carriers pay little to nothing. Nifty isn't it.
Both types of plans will need prior authorization for most non-emergency medical procedures which can be denied by an underwriter.
But to answer your question directly regarding PPO Plans Eberly it is a matter of costs and what the individual can afford. If you can afford the premium, deductible, and max out of pocket and like the so-called "freedom of choice" (which is incorrect as you have to see a network doctor to truly enjoy the benefits of any plan) then a PPO plan will be competitive.
Personally I see PPO plans becoming degraded to the point that will only cover major illnesses or injuries as I have seen deductibles as high as $10,000.
The new catch phrase insurance companies are attempting to sell is "don't think of it as insurance for unforeseen medical expenses, think of it as medical expense financing."
Chew on that a minute
