Navigate Your Health Insurance

HMO or PPO? Low premiums and high co-pays? If you're shopping for health insurance, you may be overwhelmed by the terms and conditions of health insurance plans.

A little knowledge can go a long way in the search for a cheap health insurance policy. If you know your terminology, you can find and understand a discount insurance plan that fits your lifestyle without straining your budget.

Think of your health insurance package as a scale, with your premium on one side and elements like deductibles, prescription costs, and co-pays on the other. When your premiums are higher, your other costs are typically lower. Conversely, a lower monthly premium could mean much higher costs if you have to go to the doctor or fill a prescription.

Health insurance providers offer two basic types of coverage: Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO). One type is not necessarily better than the other--rather, knowing the advantages and disadvantages of each can give you the knowledge you need to pick a plan that works for you, your income, and your family.

Under an HMO plan, doctors and hospitals band together to form a network of patient services. After you select a primary care physician, you must go through that doctor if you need a referral to a specialist. Co-pays are generally low with HMO plans and your expenditures are not high even if you need regular visits.

The downside of HMO plans is their restrictions. If your current doctor is not a member of the HMO network, you need to change physicians. Additionally, some physicians make up for low co-pays by seeing many patients, which means you may feel a lack of personal attention in the doctor's office.

If you need flexibility in your insurance plan, a PPO plan may be the way to go. PPO plans are not as restricted as HMOs--while there is still a list of preferred doctors and hospitals, you can visit an out-of-network provider, but you have to pay more. This plan works best if you need to see a number of specialists and want to avoid the hassle of obtaining a referral from a primary care physician. You pay for the convenience in monthly premiums, however, and you should weigh the benefits against the costs before making a decision.

In the end, your best insurance policy is the one that fits your lifestyle. Getting free quotes on a range of insurance policies is the best way to compare costs and benefits and determine which plan works best for you and your family.

"HMO vs. PPO," Financial Web

About the Author
Amelia Gray is a freelance writer in Austin, TX. Amelia earned a bachelor's degree in English Literature from Arizona State University and an MFA from Texas State University.

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