Chapter 16 The Healthcare Dilemma: HMO vs. PPO

1. Chapter 16The Healthcare Dilemma:HMO vs. PPO TesHardison Powerpoint Fall 2010

2. Helpful Terms and Their Meanings • Deductible- amount you pay toward your medical bills before insurance starts paying out • Premium- cost of keeping your policy in effect • Copayment- fixed dollar amount you pay each time you receive medical services

3. What is HMO? • Health Management Organizations • Usually associated with cost.

4. Pros of HMO • Lower Costs • No deductible • Low co-payments http://www.insurelane.com/health/hmo-vs-ppo.html

5. Cons of HMO • Limited Choices • Must choose from a list of pre-approved providers • Restrictions on when you receive care • Appointments can be difficult to obtain • Must get approval from doctor to see a specialist • May not be as personal • Doctors have to meet “patient quotas” daily

6. What is PPO? • Preferred Provider Organizations • Usually associated with access

7. Pros of PPO • Fewer restrictions • Able to see any doctor you choose • You will never be stuck without coverage • If choosing an “out-of-network” provider, it is covered or mostly covered • You also have the option of a pre-approved “in-network” provider that costs less http://www.insurelane.com/health/hmo-vs-ppo.html http://healthinsurance.about.com/od/understandingmanagedcare/a/HMOs_vs_PPOs.htm

8. Cons of PPO • Higher Costs • Deductible usually between $500-$2000 • Filling out more paperwork • To file a claim you must fill out the paperwork yourself http://www.residual-rewards.com/hmovsppo.html

9. Choosing Which Plan Is Right For You • HMO if you: • Prefer fewer billing hassles • Need to keep your out-of-pocket costs as low as possible • Have a family that will need annual physicals, baby visits, and OB/GYN care • PPO if you: • Want to be able to choose any doctor • Have a chronic condition, such as back pain or arthritis • Prefer to use alternative medicine such as acupuncture or chiropractors

10. “HMO, PPO, or Don’t Know?” • 100 college students aged 18-25 were asked to choose between an HMO or a PPO. • The survey sheet stated: “Which health insurance plan would you choose? – HMO - PPO -I don’t know the difference” • Results: • Of the students asked, 37 were male and 63 were female. All were students of Northeastern State University – Tahlequah Campus.

11. Did You Know… • In 2005, the national health care expenditures totaled $2 trillion Source: National Center for Health Statistics • The United States is the only wealthy, industrialized nation that does not have a universal health care system Source: Institute of Medicine of the National Academy of Sciences • Mortality rates for those covered by health insurance are 10-15% lower than for those without it • http://www.kff.org/uninsured/index.cfm

12. Tips and Suggestions • When comparing plans: • Don’t ignore a plan just because the deductible looks high. • Don’t only think about the monthly bill you’ll have to pay. • Try to estimate how much you’ll use your plan, and add up ALL the costs of paying for the plan and paying for care. • Consider consulting with an insurance agent