WASHINGTON, July 26 (UPI) -- Preferred provider organization health plans, or PPOs, are winning out over HMO-type plans even though PPOs cost more, new data say.
PPOs offer more flexibility to members by, for example, allowing members to go to their doctor of choice -- at a higher cost -- rather than choose among the specific doctors offered by the HMO.
Between 1996 and 2004 the percentage of employers offering PPO-type plans increased from 55.1 percent to 69.2 percent, while the percent offering the less expensive managed care HMO-type plans only increased from 32.4 percent to 36.2 percent, according to a survey by Health and Human Services' Agency for Healthcare Research and Quality.
And PPO-type plans, the most common type of health insurance that U.S. employers offer their workers, are increasing in popularity even though their costs are rising faster than those of HMO-type plans.
By 2004 -- the most current AHRQ data available -- the average annual premium for single coverage under an HMO-type plan had reached $3,492, compared with $3,791 for a PPO-type plan.
