California health insurance -
Understand California health
coverage - HMO versus PPO plansWhat is the Difference
Between HMO and PPO in California?

This really is the first question to ask when you are considering what
California health insurance plan to choose. They are very different in how they
work and people typically have a strong preference one way or the other in terms
of how they like to access medical care. Let's define them first in layman's
terms.
HMO
or Health Maintenance Organizations are a group of doctors, hospitals, and
other medical providers that form an association in which medical services will
be delivered to enrolled patients on a fixed dollar basis. For example, the
health carrier might pay the HMO group $500/monthly to provide medical services
for a given enrollee and then the providers manage the care.
PPO or Preferred Provider Organizations are doctors, hospitals, and
other medical providers that agreed to a discounted schedule of re-imbursement
with the carrier. For example, when a PPO member walks in the door, he or she
will be charged a discounted PPO rate for a scheduled (and covered service).
HMO's are:
- More structured in how you access care
- Tend to have richer benefits (less out of your pocket when sick or hurt)
- Can cost more in monthly premium (since new ACA law started).
PPO's are:
- More flexible in which doctors you can see and how that happens
- Tends to cost-share more of the out-of-pocket with you in the form of
deductibles, copays, and co-insurance
- Has a wide range of monthly premium amounts depending on the level of
benefits.
UPDATE: The ACA health plans are
standardized now so a Silver plan will be similar to another Silver plan
regardless of PPO or HMO network
You can quote HMO's and PPO's side by side here within the main markets:

Let Us Go through these various points in more detail for HMO.
"more structured in how you access care"
With an HMO, you choose a Primary Care Physician or designated medical group
up front. Referral and decision on health care are made through that provider
and services outside of this provider/medical group will most likely not be
covered unless a true emergency.
Authorizations for coverage are more common.
You are also limited to the medical group for specialists unless they do not
have one that you need (of course, with referral from Primary Care Physician).
The medical group is usually within 45-60 miles of your residence depending
on the health carrier.
"tend to have richer benefits"
HMO's typically provide lower copays for office visits, lower deductibles
(sometimes no deductible) and much less out of pocket for hospitalization.
The max out of pocket on HMO's typically runs half of PPO plans.
NOTE: Since Covered California came to be, there are few if any
differences in benefits at a given Metallic level between HMO and PPO.
"cost more in monthly premium"
HMO's have become very expensive over the past decade as California medical
costs escalated.
Since the benefits are richer and total medical expenditure has skyrocketed,
richer plans are absorbing more of this increase and that gets passed down to
you in the form of premiums.
HMO SYNOPSIS...HMO's work for people who would rather pay more over on a
monthly basis but have less out of pocket when a medical injury/illness happens
and can be flexible about the doctors/hospitals they see.
Let
Us go through these various points in more detail for PPO.
"more flexible in which doctors you can see and how that happens" With
a PPO plan, you can access any of the in-network PPO providers up and down
California. You do not have a Primary Care Physician and you refer yourself out
to specialist. You can even use providers out of State through the Blue Card
program. You can even see doctors outside the network but you will pay more out
of pocket. There are 10's of thousands of doctors up and down the State with the
major California health insurance carriers.
UPDATE: The Blue Shield Individual Family PPO plans will not have access to
Blue Card in 2019
"tends to cost-share more of the out-of-pocket with you in the form of
deductibles, copays, and co-insurance" With PPO plans, you are picking up
more of the costs when you get sick or hurt. Copays are higher, deductibles can
range from $500 to $5000 and co-insurance usually runs around 30-40% depending
on the plan. Some PPO plans such as the HSA Health Savings Account plans apply
everything to the main deductible.
"has a wide range of monthly premium amounts depending on the level of
benefits" PPO's offer many options from traditionally the cheapest
California health plans on the market to plans as expensive as the HMO plans.
There tends to many different options with varying copays, co-insurance, and
most importantly...deductibles.
PPO SYNOPSIS...PPO's work for people who want more flexibility over which
doctors and providers they can see and are willing to pay more when sick or hurt
to obtain this control. PPO's also work for people who just want to cover the
big catastrophic bill and keep their monthly premium down.
We hope this comparison of HMO's and PPO's in the California health insurance
market helps. You should be able to significantly narrow your options by first
answering this important question.
