888-765-5400What is an HMO and Why Does it Matter?
Blue Cross Blue Shield of North Carolina understands that insurance can be complicated and one of the biggest questions consumers have is: What is the Difference Between an HMO and a PPO? It’s a good question and the answer can have significant impact on your health care coverage.
A Health Maintenance Organization (HMO) is a type of health insurance that contracts with health care professionals and facilities to create a “provider network.” In our opinion, HMO insurance is among the least flexible types of health insurance plans and when you sign up for one of these plans, you must choose a primary care provider (PCP). If your current physician is not in the plan, you will have to find another doctor, or pay to see your current physician. With the exception of emergency care, which is always covered following Affordable Care Act reform, HMOs only cover visits to in-network providers, facilities, and pharmacies. This means that an HMO subscriber who visits an out-of-network provider will have to pay for any and all health care services out of pocket, as if he or she were completely uninsured. Usually HMOs manage care by assigning patients to a particular primary care physician who then further refers them to other specialists within the HMO, as needed.
Typically, HMOs will not pay for non-emergency care if it is performed by an out-of-network physician or facility, meaning if you go out of network you could be without coverage. You will also need a referral from your Primary Care Physician to see a specialist. Before you choose an HMO, you should understand your options for seeing providers outside the HMO’s preferred network and investigate the benefits and networks offered through these plans prior to purchase.
PPOs, on the other hand, are less restrictive than HMOs and will cover visits to both in-network and out-of-network providers, though they prefer for subscribers to receive their care from within the network. A preferred provider organization (PPO) also enters into contractual agreements with health care providers and creates a “provider network,” but unlike HMOs, PPO health insurance will cover out of network cost of care administered by out-of-network providers though you may pay more out of pocket. Care received from out-of-network providers is likely to be covered less than care received from in-network healthcare providers and copays and coinsurance costs are likely to be higher. Nonetheless, PPOs will offer some assistance even if you do happen to go out of network and some coverage is always better than none. Also, Preferred Provider Organization (PPO) plans also do not require a referral for you to see a specialist; you always have a network to visit.
Blue Cross Blue Shield of North Carolina offers coverage both in and out of network and a referral is not necessary. In fact, BCBSNC has reciprocal agreements with every state in the United States, meaning that when you travel out of state you will still have provider networks available to you. If you travel out of the country, you have the confidence of knowing that Blue Cross Blue Shield of NC has provider networks in over 200 countries outside of the United States.
In the U.S., health insurers tend to have networks of healthcare providers with whom they have special contracts. Insurers agree to encourage subscribers to see certain providers in return for a discount. The negotiated rates between insurers and healthcare providers are significantly lower than the list price that providers bill to uninsured patients. If a patient visits a doctor or hospital that her health plan has made a deal with, she is visiting a provider who is “in-network.” If a patient visits a provider who is not recognized by her health plan, she is “out-of-network.” In most cases, visiting an in-network provider will be easier and cheaper than visiting one who is out of the network.
Today, one of the biggest differences between HMOS and PPOs lies in how much patients are deterred from visiting out-of-network providers, but this difference can significantly affect not only your healthcare, but also your wallet. When choosing a health plan either on or off the federal Marketplace, make sure you know what you are purchasing and what kind of in-network and out-of-network coverage you will be offered.
For more information on Blue Cross Blue Shield of North Carolina health insurance coverage, the Marketplace and healthcare gov to apply for your subsidy, please visit our website at www.nchealthplans.com or call our toll free number 888-765-5400 and speak with one of our experienced and professional agents. Let us help you navigate through the Health Care Reform changes in accordance with the new regulations of The Affordable Care Act, also known as Obama care.