Physician assistants (PAs) have some key considerations when it comes to choosing between a preferred provider organization (PPO) and a health maintenance organization (HMO) for their health insurance. As medical professionals themselves, PAs need to weigh factors like provider networks, referrals, claim processing, and out-of-pocket costs.
PPO vs HMO: Key Differences
Here is a quick overview of how PPO and HMO plans differ:
Provider network – PPOs have a network but allow out-of-network care. HMOs require you to stay in-network.
Primary care – HMOs require you to have a primary care provider (PCP) who coordinates care. PPOs do not require a PCP.
Referrals – To see specialists, HMO patients need referrals from their PCP. PPO patients can self-refer to in-network specialists.
Claims – Providers file claims on behalf of HMO patients. PPO patients may have to file their own claims.
Costs – HMOs tend to have lower premiums but less flexibility. PPOs have higher premiums but provide more choice.
How PPOs and HMOs Work for PAs
As a PA, you have special considerations when selecting a health plan:
- Can see any provider in or out of network
- No need for PCP or referrals
- Must file own claims for out-of-network care
- Higher premiums but more flexibility
- Limited to in-network providers
- Must have a PCP who provides referrals
- Providers file claims on your behalf
- Lower premiums but less choice
Comparing Network Size
For PAs, an important factor is the network size and having access to specialist providers:
PPO networks tend to be larger, giving you more choice of providers.
HMO networks are smaller and may have gaps in specialist coverage.
As a PA, you’ll want to closely evaluate the provider networks, especially for specialists you routinely work with.
Reviewing Referral and Authorization Requirements
With a PPO, you can self-refer to any in-network specialist without needing approval from a PCP.
For HMOs, your access to specialists depends on your PCP:
You must get a referral from your PCP before seeing most specialists.
Your PCP may need to get prior authorization from the HMO before making the referral.
This can limit your choices compared to a PPO. On the other hand, your PCP can help coordinate your care.
Understanding Claims Processing
How claims get filed differs between PPO and HMO plans:
For HMO care, your providers will file claims on your behalf.
With a PPO, in-network providers will file your claims. But for out-of-network care, you may need to pay upfront and file a claim for reimbursement.
As a PA, you’ll want to consider how much out-of-network care you expect to use with a PPO and the administrative burden of filing your own claims.
Comparing Costs and Benefits
On average, PPOs cost more but provide greater flexibility:
PPO premiums tend to be higher—the average annual cost for covered workers in 2020 was $7,470 for family coverage under a PPO.
HMO premiums are typically lower—the average annual cost for family coverage was $6,722 in 2020.
But with a PPO, you pay less when using in-network providers versus an HMO that pays nothing for out-of-network care.
Out-of-pocket costs like deductibles and copays also tend to be lower for HMO plans on average. But cost sharing varies widely. You’ll need to look at specific plan details.
HMO vs PPO for Deductibles and Copays
PPO deductibles for covered workers are around $1,500 for individual policies and $3,000 to $4,500 for families.
HMO deductibles tend to be lower at around $1,200 for individuals and $2,500 to $3,500 for families.
For in-network copays:
PPOs average around $25 for primary care visits and $50 for specialist visits.
HMOs average around $20 for primary care and $40 for specialists.
But out-of-network copays may be 30-50% or more of the cost with a PPO. HMOs pay nothing for out-of-network care.
Weighing the Pros and Cons as a PA
Benefits of a PPO:
- Freedom to use out-of-network providers
- No need for a PCP or referrals
- Likely a larger provider network
Benefits of an HMO:
- Lower premiums and out-of-pocket costs
- No claims to file yourself
- Coordinated care through a PCP
Downsides of a PPO:
- Higher premiums
- Potentially high out-of-network costs
- Need to file your own out-of-network claims
Downsides of an HMO:
- Limited provider network
- Need referrals to see specialists
- No coverage for out-of-network care
What Type of Health Plan Do Most PAs Have?
According to surveys, PPOs tend to be the most common type of health plan for both civilian and military PAs:
In one survey, around 49% of civilian PAs had a PPO plan.
Only 7% had an HMO plan.
For PAs in the military, 59% used TRICARE which functions similar to a PPO.
But health plan choices can vary regionally and depend on factors like employer-based coverage. So your options as an individual PA may differ.
Tips for PAs Comparing Health Plans
Follow these steps when comparing options:
Check the provider network – Search for your preferred doctors, medical groups, hospitals, labs, and pharmacies.
Review referrals and authorizations – Understand the requirements to see specialists for HMO plans.
Look at total costs – Factor in monthly premiums, deductibles, copays, and maximum out-of-pocket costs.
Consider your expected utilization – Do you anticipate significant out-of-network care where a PPO may offer more flexibility?
Compare covered services – Make sure the plans cover all medications and services you need.
Evaluate administrators – Research reviews and ratings for the insurance company and third party administrators.
Frequently Asked Questions About PPO vs HMO for PAs
Should I choose an HMO or PPO as a PA?
It depends on your priorities. PPOs provide more flexibility while HMOs offer lower costs. If you value being able to self-refer or use out-of-network providers, a PPO may be better. But if you want to maximize cost savings, an HMO may be preferable.
Do PAs get better health insurance?
PAs may have access to more plan options through an employer. Average annual premiums for family coverage were around $7,470 for a PPO and $6,722 for an HMO based on recent surveys of covered workers. But specific costs depend on your employer’s plan offerings.
What do most PAs select for insurance?
Surveys indicate most civilian PAs have PPO coverage while military PAs often use TRICARE which is similar to a PPO. But HMO, POS, and other plan types are also used by PAs depending on factors like geographic location and employer-based options.
How do I find PA-friendly health insurance?
Look for plans with broad provider networks that include specialists PAs commonly work with. Avoid narrow network HMOs. PPOs generally offer the most flexibility. Review the plan details and search provider directories to find PA-friendly coverage.
The Bottom Line
When choosing between HMO and PPO plans, PAs should consider factors like provider network breadth, the need for referrals, ease of claim filing, total costs, and benefits covered. On average, PPOs provide more flexibility while HMOs offer lower premiums. But specific costs and coverage details can vary widely. Conducting thorough research and comparing plans is crucial for PAs to find the right health insurance fit.
What is an HMO, PPO, HDHP or EPO
Why do doctors prefer PPO over HMO?
What is the difference between a PPO and a HMO authorization?
What’s the difference between HMO POS and PPO?