Tuesday, February 7, 2012


In everyone's life insurance plays very important role either as part of investment or for the safety of life as well as asset. In any continent or country, the insurance market is one of the basics of the economy. One must be conversant with insurance terms like HMO and PPO. Now actually we need to see actually what HMO and PPO means.
HMO refers to Health Maintenance Organization, and is an organization made of such members which are paying their monthly premium for the health insurance. HMO owns and operates its own healthcare facilities. It's a form of health insurance consisting of range of different coverage in various forms. It is also having various doctors and medical professionals which offer care through HMO plans at attractive monthly rates and premium. The doctor's visits as well as medical treatments charges are covered under this policy. HMO is having a network of doctors and health care service providers. One who enrolls in HMO plan will get his private doctor and all the service will be provided by the private doctor. The doctors enrolled in the HMO are given the salary from HMO and also full authority over the doctor is taken by HMO. If HMO makes profit then doctors are also given their share of profit.
Another such plan is PPO i.e. Preferred Provider Organization which is same as HMO. It is composed of doctors, hospitals and other healthcare service providers which provide medical services at reduced price. Here a member of PPO plan has the freedom to choose the desired doctor as well as hospitals they want to visit. Obtaining service from the preferred medical service provider is the main motto of PPO plan. The coverage under PPO plan requires ongoing payment of the premium for the policy holders. PPO plan also offers flexibility to the plan owners that they can hire a doctor or can avail the service of such healthcare providers which are out of the network of PPO.
As PPO and HMO are sometimes confusing so most of them find it difficult to decide which plan to avail and what benefits they will get. So for that one needs to understand basic difference between PPO vs HMO. In PPO a policy owner can acquire the service of physician and doctor who are out of the network of PPO but this is not the case in HMO. While PPO owners pays the extra premium on availing this service for the flexible reason.

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