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Home / News & IndustryManaged Care Insight and Analysis
Updated: November 10, 2009
HMOs Top PPOs – Members Save Money On Premiums; Customer Support

Health plan HMO members are saving money on their premiums over those enrolled in PPOs, found a new survey. However, annual out-of-pocket costs for plan premiums were up 38 percent from two years ago for both those in HMOs and PPOs, found the survey by Consumer Reports National Research Center.

Despite the comparative ‘freedom’ of a PPO, choosing an HMO over a PPO seems like a smarter choice than in the past, according to the survey results. "While overall satisfaction scores were similar, respondents in HMOs paid less for premiums than people in PPOs ($1,466 compared with $2,003) and less out of pocket on their medical bills," the survey report said. Among PPO members who were seriously ill, 69 percent paid $1,000 or more on bills, while only 47 percent of seriously ill people in HMOs spent that much.

The majority of the 37,481 survey participants were in an employer-based plan, which they could keep under most health-reform proposals now before Congress.

The median annual out-of-pocket costs for premiums increased by 38 percent in the past two years, and only 64 percent of those surveyed were "Very" or "Completely" satisfied with their current health insurance plan, found the survey conducted by the Consumer Reports.

"That’s a lukewarm response and a slight drop from the 67 percent in our 2007 report," said Mandy Walker, senior project editor for Consumer Reports. "In terms of services we rate, that puts satisfaction with health insurance above satisfaction with cable TV, a perennial whipping post, but below pharmacies and real-estate agents."

The median premium cost was $1,829, survey respondents reported, an increase of about $500 since 2006.

In the past, HMO members who were seriously ill had more trouble getting access to care, but this time there was little difference: Of HMO members who were ill, 15 percent had problems getting care, compared with 14 percent of PPO members, according to the report.

Problems With Service

People in PPOs had more trouble with their bills. Overall, 24 percent of people in PPOs had a billing problem, while just 11 percent of HMO members had similar issues. Moreover, 33 percent of PPO members who reported having a serious illness had billing problems compared to just 14 percent of seriously ill HMO patients.

Twenty percent of PPO members also said they had trouble with telephone customer support and were more likely to contact the plan several times to get a problem solved, versus 12 percent of those in HMOs.

For the first time, the survey also asked subscribers about using plan Web sites to seek information,forms, and customer support. HMOs came out on top again, and had top notch scores for ease of navigation, easy access to forms, and online help.

Among other survey findings:

  • Respondents’ experiences with their health insurance were far better if they were enrolled in plans at the top of Consumer Reports’ ranking. Only 4 percent of respondents had problems getting the care they needed in higher-rated plans.
  • Eighteen percent of all respondents said that they had trouble getting to see a plan doctor at some point during the year. Among users of some lower-rated plans, as many as 16 percent complained it was either difficult or impossible to get needed care.

Group Health Cooperative and Health Alliance Plan topped the list of HMOs in the survey. Plan members reported fewer problems getting the care they needed, and HAP members were more satisfied with their choice of doctors and the care they received, Consumer Reports said.

Also among the top rated HMOs were several Kaiser Permanente plans around the country; Preferred Care; Harvard Pilgrim Health Care; and Independent Health.

Oxford Health Plan and Aetna Health HMO members gave the plans lower ratings for choice of providers, the survey found. Oxford members also reported more problems getting the care they needed, while Aetna plan members reported more problems getting access to doctors.

Anthem Blue Cross and Blue Shield of Connecticut were among the top-rated PPOs. Members remain very pleased with their providers and care they received. Group Health Inc., Great-West Healthcare and Health Net members rated choice of doctors in those plans worse than other PPOs.

Full ratings and side-by-side comparisons of 35 HMOs and 41 PPOs are available in the September issue of Consumer Reports, and online at

  This article was taken from:
The Executive Report on Managed Care

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