HMO Versus PPO: What is the Difference?

When it comes to health insurance, you have your choice of several plan types. Two popular plan that you frequently see are HMOs and PPOs. HMO stands for Health Maintenance Organization, and the coverage restricts patients to a particular group of physicians called a network. PPO is short for Preferred Provider Organization and allows patients to choose any physician they wish, either inside or outside of their network.

Below is a comprehensive list of the differences between the two plans:

HMO Health Insurance Plans

An HMO gives you access to certain doctors and hospitals within its network. A network is made up of providers that have agreed to lower their rates for plan members and also meet quality standards. But unlike PPO plans, care under an HMO plan is covered only if you see a provider within that HMO’s network. There are fewer opportunities to see a non-network provider.

Here are some key features about HMOs:

• Some plans may require you to select a primary care physician (PCP), who will determine what treatment you need.
• With some plans, you may need a PCP referral to be covered when you see a specialist or have a special test done.
• If you opt to see a doctor outside of an HMO network, there is no coverage, meaning you will have to pay the entire cost of medical services.
• Premiums are generally lower for HMO plans.

PPO Health Insurance Plans

PPO plans provide more flexibility when picking a doctor or hospital. They also feature a network of providers, but there are fewer restrictions on seeing non-network providers. In addition, your PPO insurance will pay if you see a non-network provider, although it may be at a lower rate.

Here are some key features about PPOs:

• You can see the doctor or specialist you’d like without having to see a PCP first.
• You can see a doctor or go to a hospital outside the network and you may be covered. However, your benefits will be better if you stay in the PPO network.
• Premiums tend to be higher.

HMO Versus PPO: Plan Comparison

HMO and PPO plans differ in network size, the ability to see specialists, costs, and out-of-network coverage. Compared to PPOs, HMOs cost less. However, PPOs generally offer greater flexibility in seeing specialists, have larger networks than HMOs, and offer some out-of-network coverage.

If you have a choice between these two types of plans, you’ll need to consider the pros and cons of each type. With any plan, check the provider network to see if your preferred providers are in the plan’s network, since staying in-network will save you money. Your chances will be better with a PPO plan, since PPO networks tend to be broader, but it’s best to do your research before choosing. You may find that the particular HMO plan you’re considering contains your preferred providers, or at least enough of them to meet your needs.

ARC’s licensed representatives are available to help walk you through your options and determine which plan will work best for you. Contact us today for a consultation!