What’s the Difference Between HMO and PPO Plans?

When you’re shopping for health insurance, you have a lot of options to choose from.  

Knowing the differences between plans can help you choose the one that’s right for your health care needs and budget.

As you look at plans, you may notice that some plans are HMOs and some are PPOs, but what does that mean?

  • HMO stands for health maintenance organization. 
  • PPO stands for preferred provider organization. 

All these plans use a network of physicians, hospitals and other health care professionals to give you the highest quality care. The difference between them is the way you interact with those networks. 

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With an HMO plan, you pick one primary care physician. All your health care services go through that doctor. That means that you need a referral before you can see any other health care professional, except in an emergency. Visits to health care professionals outside of your network typically aren’t covered by your insurance.

For example, if you get a skin rash, you wouldn’t go straight to a dermatologist. You would first go to your primary care physician, who‘d examine you. If your primary care physician can’t help you, he or she will give you a referral to a trusted dermatologist in your network that will. 

One exception to this is that women don’t need a referral to see an obstetrician/gynecologist, or OB/GYN, in their network for routine services such as Pap tests, annual well-woman visits and obstetrical care.

Coordinating all your health care through your primary care physician means less paperwork and lower health care costs for everyone.

With an HMO plan, you pick one primary care physician. All your health care services go through that doctor. That means that you need a referral before you can see any other health care professional, except in an emergency. Visits to health care professionals outside of your network typically aren’t covered by your insurance.

For example, if you get a skin rash, you wouldn’t go straight to a dermatologist. You would first go to your primary care physician, who‘d examine you. If your primary care physician can’t help you, he or she will give you a referral to a trusted dermatologist in your network that will. 

One exception to this is that women don’t need a referral to see an obstetrician/gynecologist, or OB/GYN, in their network for routine services such as Pap tests, annual well-woman visits and obstetrical care.

Coordinating all your health care through your primary care physician means less paperwork and lower health care costs for everyone.

Which one is right for me?

If you prefer to have your care coordinated through a single doctor, an HMO plan might be right for you. And if you want greater flexibility or if you see a lot of specialists, a PPO plan might be what you’re looking for. 

For more information on HMO and PPO plans, check out our available individual and family plans.