4 ms·

HMOs are so much better than PPOs, but they're rare these days. They are significantly cheaper than PPOs. Most HMOs don't have deductibles, and all of them have

HMOs are so much better than PPOs, but they're rare these days. They are significantly cheaper than PPOs. Most HMOs don't have deductibles, and all of them have lower premiums than PPOs. The "out of network" coverage of PPOs is an irrelevant scam. Your insurer covering 10% of a $200,000 out of network surgery is still going to bankrupt 99% of people in America. HMOs require you to get a referral from your primary care doctor to see a specialist, which has the added benefit of making sure people actually have a PCP. Primary care is one of the few types of care where the more you apply it, the better a patient's health outcome. No one gets an HMO because they're scared of having less choice of which doctors they can see. They pay more to have a choice that's ultimately irrelevant to their health. Most people choose doctors based on friend/family referrals and Yelp reviews, meaning they don't know how to choose a doctor. Reviews/referrals have no relation to health outcomes. The end of the article refers to the "medical loss ratio" enforced by the ACA, which did indeed incentivize insurance carriers to tolerate higher healthcare bills. This affects PPOs much worse than HMOs. It should all be burnt down. Further reading, one of the best books on the subject: "An American Sickness"

CobaltFire 3y ago
Perhaps rare in the general population, but the entire military is functionally an HMO (as are the dependents, unless specifically opted into the PPO option, which is rare). I just swapped to the PPO version after retiring because the cost isn't any different, and I'm no longer in the area of the easy HMO's for them (Military Treatment Facilities). I guess I can't fathom not having a PCP. As far as finding a Primary, what is your actual method for finding a good one if not by people who have experience with them?
jmspring 3y ago
I disagree, HMOs can be severely limiting especially as medical practioners (and medical groups) change or cancel insurance groups (HMO providers) they partner with. Further, getting access to specialists can be daunting - in network may be over loaded/over booked (appointment in 6-9 months); out of network providers can take significant hoops to jump through.
- stevebmark 3y ago
  The same is true for PPOs, you just pay more for them. And a bigger problem is healthcare deserts. If you're in a rural area your options are limited by default.
  - Racing0461 3y ago
    I'll pay more for faster wait time and approching specialists from the "customer frame" as opposed to a "referral frame/shuffling through the system". > And a bigger problem is healthcare deserts. If you're in a rural area your options are limited by default i don't care about that. unlike the last healthcare debat, i think i'll keep my doctor this time.
psyklic 3y ago
My conclusion was that if you're young/healthy, HMO vs PPO may not matter as much. That said, I went with a PPO because in my case: (1) it's faster to see a specialist, since a referral is not required; and (2) in my area, it has vastly more in-network doctors who are highly-rated. One gotcha I've run into is that most plans (both HMO & PPO) are only valid in a single US state. The one exception is "emergencies," but when I asked it seems this is basically only the ER (and I was told only if it turns out it's actually an emergency, whatever that means). I believe you can get out-of-state covered via out-of-network. But as mentioned, the out-of-pocket max on my plan is shockingly ~6x more for out-of-network than in-network. So you won't pay 90% of $200k, but it will still end up a very substantial amount. But maybe that could still be worth it to see an out-of-state specialist?
- zamfi 3y ago
  > I believe you can get out-of-state covered via out-of-network. But as mentioned, the out-of-pocket max on my plan is shockingly ~6x more for out-of-network than in-network. So you won't pay 90% of $200k, but it will still end up a very substantial amount. But maybe that could still be worth it to see an out-of-state specialist? See, this would be the expected, plain reading of out-of-network vs. in-network deductibles and coverage. But be very, very careful with out-of-network: the truth is that your insurance only covers whatever percentage they claim they cover of the "usual and customary" charges for out-of-network care, not the the actual charges you receive. Because out-of-network providers are by definition not contracted with the insurance carrier, they can (and do!) charge you whatever they want. And then your insurance only pays for 10% of that, because they then claim that the "usual and customary" charge for whatever care you received is only 10% of what your provider charged you. (And, of course, the out-of-pocket max for out-of-network care is only for "usual and customary", not any charges beyond that—so it offers basically no protection.) ...which leaves you with a bill for 90% of $200k that you're not particularly in a position to negotiate—neither with your insurance company, which has no incentive to cover it, nor with your care provider, which has already billed you and will happily send your bill to collections (most of the time, though not all the time) and take XX% of it rather than give you a 90% discount. So: on the one hand, you have zero price transparency before you receive care; on the other hand, your insurance contract has terminology that implies one thing but hides the reality behind reasonable-sounding legalese. One would be hard-pressed to design a worse system.
orochimaaru 3y ago
If I contribute a certain amount to my hsa, my company kicks in about $1k per family member which takes a big bite out of the deductible. Not sure how many companies do that. But I believe it may be quite common.
petra 3y ago
//Most people choose doctors based on friend/family referrals and Yelp reviews, meaning they don't know how to choose a doctor. Reviews/referrals have no relation to health outcomes. People don't have access to doctors' health outcome data. Are there any useful proxies for that ?
Racing0461 3y ago
This feels all well and good but in reality it might work out differently. Your hmo argument feels like centering the lower quartile folks at the cost of the average middle class man that wants agency in his healthcare journey. the reason i chose a ppo instead of an hmo is with a ppo i can go visit a psyciatrist directly, tell them i had adhd symptoms, get diagnosed and get prescribed adderall pretty much immediately. With an hmo that would take at least months. Why pay full price for a canadian/uk style wait/referral system?
- piperswe 3y ago
  In my experience, psychiatrists will often require a referral even with a PPO - not for insurance reasons, but for their own reasons.
  - Racing0461 3y ago
    yep, i was able to shop around till i found one that wasn't old school (ie we need to talk to your second grade teacher to diagnose you). exactly due to being on a ppo plan.
- stevebmark 3y ago
  HMOs don't prevent you from choosing a psychiatrist as far as I know, you just need to find one in network. And yes, if want a pill pusher or crooked doctor who gives you what you think you need without following evidence based medicine, a PPO is better for that. Those are going to be more rare on HMOs because the doctors in HMO networks are more connected.
ics 3y ago
I loved my previous HMO because I was in a union and the (huge) premium was mostly covered by the company however it's really never that simple. Changing jobs and insurance companies means all of a sudden all of my previous doctors are out of network and now I have to pick and choose which ones are worth sticking with while eating the out-of-network costs and which are replaceable. Multiply that by several family members and it's a nightmare. Continuing the counterexample, recently my daughter had to be hospitalized literally a month after changing to a PPO. Amazingly, our $175,000 bill ended up costing me just $300 because she was admitted to inpatient care. If I had been on my previous HMO, it likely would have either cost $50k for the out-of-network, out-of-pocket maximum (assuming nothing exempt from that even...) or worse, delayed getting care while attempting to figure out any of that on the spot.
- stevebmark 3y ago
  Was there some limitation listed with your HMO coverage, or are you just speculating? All insurance plans have emergency coverage regardless of if the hospital is in your network.
  - ics 3y ago
    I would have to dig through the old plan details again but they had a pretty similar example to our situation where they estimated you would owe essentially the entire bill minus some copay amounts, i.e. $100k - $300, which is funny but depressing. Their version of emergency coverage would have come in to play perhaps if one of us had been hit by a car and were bleeding out on the street.
dublinben 3y ago
Whenever an employer has offered a choice of PPO or HMO, they’ve been identical in price. If HMOs are supposed to be cheaper, then I guess I’d be overpaying for the supposed benefits versus a PPO.

CobaltFire 3y ago

Perhaps rare in the general population, but the entire military is functionally an HMO (as are the dependents, unless specifically opted into the PPO option, which is rare). I just swapped to the PPO version after retiring because the cost isn't any different, and I'm no longer in the area of the easy HMO's for them (Military Treatment Facilities). I guess I can't fathom not having a PCP. As far as finding a Primary, what is your actual method for finding a good one if not by people who have experience with them?

jmspring 3y ago

I disagree, HMOs can be severely limiting especially as medical practioners (and medical groups) change or cancel insurance groups (HMO providers) they partner with. Further, getting access to specialists can be daunting - in network may be over loaded/over booked (appointment in 6-9 months); out of network providers can take significant hoops to jump through.

stevebmark 3y ago
The same is true for PPOs, you just pay more for them. And a bigger problem is healthcare deserts. If you're in a rural area your options are limited by default.
- Racing0461 3y ago
  I'll pay more for faster wait time and approching specialists from the "customer frame" as opposed to a "referral frame/shuffling through the system". > And a bigger problem is healthcare deserts. If you're in a rural area your options are limited by default i don't care about that. unlike the last healthcare debat, i think i'll keep my doctor this time.

psyklic 3y ago

My conclusion was that if you're young/healthy, HMO vs PPO may not matter as much. That said, I went with a PPO because in my case: (1) it's faster to see a specialist, since a referral is not required; and (2) in my area, it has vastly more in-network doctors who are highly-rated. One gotcha I've run into is that most plans (both HMO & PPO) are only valid in a single US state. The one exception is "emergencies," but when I asked it seems this is basically only the ER (and I was told only if it turns out it's actually an emergency, whatever that means). I believe you can get out-of-state covered via out-of-network. But as mentioned, the out-of-pocket max on my plan is shockingly ~6x more for out-of-network than in-network. So you won't pay 90% of $200k, but it will still end up a very substantial amount. But maybe that could still be worth it to see an out-of-state specialist?

zamfi 3y ago
> I believe you can get out-of-state covered via out-of-network. But as mentioned, the out-of-pocket max on my plan is shockingly ~6x more for out-of-network than in-network. So you won't pay 90% of $200k, but it will still end up a very substantial amount. But maybe that could still be worth it to see an out-of-state specialist? See, this would be the expected, plain reading of out-of-network vs. in-network deductibles and coverage. But be very, very careful with out-of-network: the truth is that your insurance only covers whatever percentage they claim they cover of the "usual and customary" charges for out-of-network care, not the the actual charges you receive. Because out-of-network providers are by definition not contracted with the insurance carrier, they can (and do!) charge you whatever they want. And then your insurance only pays for 10% of that, because they then claim that the "usual and customary" charge for whatever care you received is only 10% of what your provider charged you. (And, of course, the out-of-pocket max for out-of-network care is only for "usual and customary", not any charges beyond that—so it offers basically no protection.) ...which leaves you with a bill for 90% of $200k that you're not particularly in a position to negotiate—neither with your insurance company, which has no incentive to cover it, nor with your care provider, which has already billed you and will happily send your bill to collections (most of the time, though not all the time) and take XX% of it rather than give you a 90% discount. So: on the one hand, you have zero price transparency before you receive care; on the other hand, your insurance contract has terminology that implies one thing but hides the reality behind reasonable-sounding legalese. One would be hard-pressed to design a worse system.

orochimaaru 3y ago

If I contribute a certain amount to my hsa, my company kicks in about $1k per family member which takes a big bite out of the deductible. Not sure how many companies do that. But I believe it may be quite common.

petra 3y ago

//Most people choose doctors based on friend/family referrals and Yelp reviews, meaning they don't know how to choose a doctor. Reviews/referrals have no relation to health outcomes. People don't have access to doctors' health outcome data. Are there any useful proxies for that ?

Racing0461 3y ago

This feels all well and good but in reality it might work out differently. Your hmo argument feels like centering the lower quartile folks at the cost of the average middle class man that wants agency in his healthcare journey. the reason i chose a ppo instead of an hmo is with a ppo i can go visit a psyciatrist directly, tell them i had adhd symptoms, get diagnosed and get prescribed adderall pretty much immediately. With an hmo that would take at least months. Why pay full price for a canadian/uk style wait/referral system?

piperswe 3y ago
In my experience, psychiatrists will often require a referral even with a PPO - not for insurance reasons, but for their own reasons.
- Racing0461 3y ago
  yep, i was able to shop around till i found one that wasn't old school (ie we need to talk to your second grade teacher to diagnose you). exactly due to being on a ppo plan.
stevebmark 3y ago
HMOs don't prevent you from choosing a psychiatrist as far as I know, you just need to find one in network. And yes, if want a pill pusher or crooked doctor who gives you what you think you need without following evidence based medicine, a PPO is better for that. Those are going to be more rare on HMOs because the doctors in HMO networks are more connected.

ics 3y ago

I loved my previous HMO because I was in a union and the (huge) premium was mostly covered by the company however it's really never that simple. Changing jobs and insurance companies means all of a sudden all of my previous doctors are out of network and now I have to pick and choose which ones are worth sticking with while eating the out-of-network costs and which are replaceable. Multiply that by several family members and it's a nightmare. Continuing the counterexample, recently my daughter had to be hospitalized literally a month after changing to a PPO. Amazingly, our $175,000 bill ended up costing me just $300 because she was admitted to inpatient care. If I had been on my previous HMO, it likely would have either cost $50k for the out-of-network, out-of-pocket maximum (assuming nothing exempt from that even...) or worse, delayed getting care while attempting to figure out any of that on the spot.

stevebmark 3y ago
Was there some limitation listed with your HMO coverage, or are you just speculating? All insurance plans have emergency coverage regardless of if the hospital is in your network.
- ics 3y ago
  I would have to dig through the old plan details again but they had a pretty similar example to our situation where they estimated you would owe essentially the entire bill minus some copay amounts, i.e. $100k - $300, which is funny but depressing. Their version of emergency coverage would have come in to play perhaps if one of us had been hit by a car and were bleeding out on the street.

dublinben 3y ago

Whenever an employer has offered a choice of PPO or HMO, they’ve been identical in price. If HMOs are supposed to be cheaper, then I guess I’d be overpaying for the supposed benefits versus a PPO.