When considering an independently managed care plan, most buyers will have an option between an inexpensive Health Maintenance Organization (HMO) and a more expensive Preferred Provider Organization (PPO). There might be more or less options for certain buyers but these two types of plans tend to get a lot of attention as they offer relatively inexpensive health insurance rates and, under the right circumstances, ample coverage as well. Some insurance experts recommend a PPO for child health insurance and an HMO for single buyers, but this is fairly broad advice. In considering these types of policies, it's best to compare the specific advantages and disadvantages of these types of policies for different providers. This makes it easier to determine whether a PPO is worth the higher health insurance rates.

The main difference between an HMO and a PPO is that an HMO will only pay for visits to member hospitals and physicians, while a PPO will cover out-of-plan service providers, although this coverage will be more expensive than coverage for in-plan providers. Generally, a PPO provides more options for its members, which is why it's often recommended for child health insurance plans. An HMO might be much more limited depending on where the buyer lives, the quality of member hospitals and other factors. Before buying a policy, buyers should find out which local health care providers are covered by different companies' plans, as this can have a significant effect on the value of the policies.

Buyers should consider how co-payments and coinsurance will differ and try to figure out how different types of managed care plans would handle a normal year's medical bills. Going online and collecting insurance quotes can also provide some perspective on the differences between HMO and PPO insurance plans and costs. However, it's important to keep individual goals in mind. For instance, buyers with children should look for capable health plans that will cover fairly large medical bills while offering a choice of physicians. Healthy students and young people might prefer to get a simple HMO that will allow them to stay insured and that provides protection from serious medical bills, but physician choice might be less of an important factor for these individuals. High-coverage limit HMO plans with relatively high co-pays but low coinsurance rates can be a good option for individuals on a budget who can't afford a PPO.

By comparing health insurance rates carefully and by studying the differences between various options, buyers can find appropriate health insurance coverage without spending too much money. Managed care plans offer great savings, particularly when buyers use research as a tool to shape their coverage.