One fine day, we will all look back at these terms – PPO, HMO, EPO, Deductibles and laugh about how we had to jump through hoops to figure out which coverage to get. For now though, the waters are tricky to navigate – and one has to understand the key differences between PPOs and HMOs (and their hybrid child – the EPO)
The Biggest Surprise – Pre-Authorization
Requires Pre-authorization? – This to me, is the DECIDER question – this essentially allows insurance companies to overrule your need for services. Since I do not trust any insurance company, I like to avoid this pre-authorization – and hence prefer plans without this need. In effect, that limits me to HMOs.
|Pays for out-of-network care?||No||Yes||No|
|Requires a primary care physician who acts as a gatekeeper to access other services?||No||No||Yes|
|Requires referrals to see a specialist?||No||No||Yes|
|How are doctors paid by the health plan?||Paid only when they provide a service. More services = more $.||Paid only when they provide a service. More services = more $.||Paid the same amount each month whether they provide lots of services or none.|
Note that PRE-AUTHORIZATION is different from REFERRALS – in case of referrals, PPOs are more flexible than HMOs. In case of pre-auths however, HMOs win hands down.