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Health Insurance Plans- Insurance Systems

HMO Health Insurance Plans

The HMO Health Insurance Plan is considered the most affordable system. The insured has to select a Primary Care Physician (PCP) doctor from the plan’s directory. The PCP has the authorization to refer patients to specialists, hospitals and other service providers. If a patient seeks a service without the PCP authorization he/she may end up paying a very high cost for this service, as the insurance carrier may not cover it.


  1. Relatively lower cost for major health services.
  2. Good HMO system has the fine balance between cost and services.
  3. Most billing and payment matters are provided by the health providers and are taken care of by the HMO management. There is no need for frequent contact between the insured and the insurance company.
  4. Patients are not required to check first before each office visit if their PCP is with in the Insurance "IN NETWORK" directory. If the PCP office is terminating the relationship with the insurance company, they tend to notify the insured with the change.


  1. Limited health services. Insurance carriers tend to exclude high priced services and new drugs from the HMO systems.
  2. Patient cannot see a specialist without the PCP authorization. This process is not always in the best interest of the patient.
  3. The "IN-NETWORK" doctors’ directory is changing frequently. Insured may not be able to get service from the same doctor for a long time. Doctors may choose not to participate with the HMO "IN-NETWORK" system if it pays less than the PPO plans.

PPO (Preferred Providers Organization) Health Insurance Plans

The PPO Health Insurance Plan is a system that allows insured to choose their doctors and health facilities. The monthly premiums are typically higher compared to HMO plans, but it has major advantages over the HMO system. As with the HMO, the IN-NETWORK doctors and services are the most cost effective.


  1. Insured are free to choose their doctors and health care facilities from the PPO IN-NETWORK directory.
  2. Most doctors prefer to work with PPO networks, their contacts with the health insurance companies paid more compared to the HMO.
  3. More drugs and high priced services are covered under the PPO system.
  4. The fact that insured can choose their doctor may save them time and money by getting service from specialists at the time of need.


  1. Insured have to deal directly with their health insurance and service providers for billing issues. It takes time and effort to manage all the payment matters.
  2. Insured is required to check with Provider before each office visit to verify if the healthcare provider accepts their insurance. In case the service will not be covered, or the service provider was OUT-OF-NETWORK, it may result in higher medical bills.
  3. PPO monthly premiums typically cost more compared to the HMO plans.

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