Whether you are enrolled in a health insurance plan through your employer or you have an individual policy, chances are you are part of PPO or HMO plans. These are two of the most common health insurance plans that are available. If you do not have health insurance and you are just beginning to compare health insurance quotes, following are some differences between the two plans.

HMO plans, or Health Maintenance Organizations, require members to choose a primary physician who will oversee all aspects of your health care needs. If you need to use the services of a specialist, your doctor will refer you to one who is part of an approved network. They will also forward you to approved medical facilities should you need certain procedures such as x-rays. If you use the services of an approved specialist without obtaining a doctor referral or if you choose to seek medical treatment outside of the network, then you are usually required to pay for any medical expenses out of pocket.

PPO plans, or Preferred Provider Organizations, differ from HMO plans in several ways. Although this plan also uses physicians and medical facilities in an approved network, they do not require members to select a primary care physician for routine medical care. Using the services of a preferred provider means that you only need to pay a set deductible and a co-payment for visits. If you seek medical treatment outside of the network, then your payment amounts will be increased. You will also have to pay your physician at the time the service is received and then submit a claim to be reimbursed.

Most health plans do require members to pay a deductible for each service received or on an annual basis. A deductible is a set amount that the plan member is responsible for before the health insurance benefits will be paid out by the insurance company. A co-payment is a certain percentage that a member is required to pay. The insurance company will then pay for the remainder. A deductible and co-pay can differ depending on the service or treatment received. For example, there may be one co-pay required for prescription drugs and another one required for physiotherapy or wellness services.

It is important to know the difference between these two health insurance plans, especially if your employer gives you a choice. When you obtain health insurance quotes individually, you should always ask for quotes for both types of plans. In order to choose which plans are best for you and your family, you should carefully consider your financial budget as well as your health care needs. One plan may suit one individual but not another.