Understanding the Differences between HMO and PPO Health Coverage in Florida

Most Americans, whether they are self-insured or receiving health coverage in Florida through their employers, have either HMO, which is an abbreviation for health maintenance organization, or PPO, which stands for preferred provider organization, plan types. There is also a point of service, or POS, type plan which is less common but combines the benefits of both.  

Managed Care Plans

HMO, PPO and POS plans are all known as ‘managed care’ plans because the insurance company contracts with doctors, hospitals, surgeons and other healthcare services in order to provide affordable care.  The group of individuals and entities with which the insurance company contracts are known as the ‘network’, and the patient is typically required to seek care within this group. While it is possible for the patient to receive care outside of the network in some cases, there are typically more out of pocket costs associated with doing so. How much the patient is required to pay for the care he or she receives depends upon the type of plan in place, the healthcare provider and the insurance company itself.

HMO

HMO, or health maintenance organization, is a plan in which the insured is required to receive nearly all of his or her healthcare within a network. Most of the time, consumers are also required to select a primary care physician, or PCP, who will be the starting point for all of the provided healthcare. In the event that the insured needs to see a surgeon, a specialist or receive any sort of care that cannot be provided by the PCP, then the insured is required to receive a referral from the PCP in order for the treatment to be paid for under their health coverage in Florida. Patients who choose doctors outside of the network will likely be required to pay for that care out of pocket.

PPO

In a PPO, or preferred provider organization, the care is still managed; however, there is one very important difference. Rather than a network that can only be accessed through a PCP, there is a network of ‘preferred’ providers from which the insured can select. There is no need to select a PCP and there is no need to obtain a referral in order to receive care from any provider within the network. Like HMO plans, individuals who opt to seek care outside of the network will be required to pay for that care out of pocket.

Filing Claims

One of the biggest concerns regarding managed care has to do with filing claims. In HMO plans, the insured do not have to file claims at all. Rather, the physicians and other entities providing the care are required to file claims with the insurance company in order to get paid. Providers cannot charge or bill patients anything outside of their required copays. However, with PPO plans, whether or not you are required to actually file a claim with the insurance company depends on the provider you choose. Preferred providers will file claims in order to get paid; consumers who opt to go out of network for care will need to pay in full and then file a claim to receive reimbursement from the insurance company.

Although HMO and PPO plans are both considered managed care, which is the most common type of health coverage in Florida, there are some huge differences in these plan types. Generally speaking, if you have an HMO plan, you will have fewer choices available to you when it comes to the healthcare providers and facilities that are covered under your plan.