HMO vs. PPO

HMO (Health Maintenance Organization) and PPO (Preferred Provider Organization) are both types of managed healthcare plans offered by insurance companies. The key features and differences between the two are:

HMO:

• A type of managed care plan that provides healthcare services through a network of doctors and hospitals
• Requires members to choose a primary care physician who is responsible for managing their healthcare needs and referring them to specialists as needed
• Generally has lower out-of-pocket costs and no deductibles
• Members may need to obtain referrals from their primary care physician to see specialists
• Out-of-network care is generally not covered, except in emergency situations

Example: A member of an HMO plan may visit their primary care physician for an annual check-up. If the physician identifies a health issue that requires a specialist, the member will need to obtain a referral from their primary care physician before seeing the specialist. The specialist will be part of the HMO's network of providers, and the member will generally have lower out-of-pocket costs for the visit.

PPO:

• A type of managed care plan that provides healthcare services through a network of doctors and hospitals, but also allows members to see providers outside of the network

• Does not require members to choose a primary care physician or obtain referrals to see specialists
• Generally has higher out-of-pocket costs and deductibles than HMO plans

- Members may pay more for out-of-network care, but the plan will still provide some coverage

Example: A member of a PPO plan may visit a specialist outside of the plan's network for a particular medical condition. While the member may pay more out-of-pocket for the visit, the PPO plan will still provide some coverage for the care received.

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