What is the Diffeence Between PPO and HMO Insurance?

With an HMO, you must choose a primary care physician.

When seeking health insurance for you and your family, the two most popular plans that your employer may offer are the health maintenance organization and the preferred provider organization. Although both of these plans provide adequate health coverage, these plans have some differences that may or may not work for your particular situation.

Significance

An HMO is a health care plan where a primary care physician manages its members basic medical care and refers members who require specialized care to an in-network medical provider.

A PPO is a health care plan in which members can choose their medical care from an in-network or out-of-network medical provider. Members do not need a referral.

Cost

Typically, the only costs involved with choosing an HMO is the monthly premiums and the requisite co-pay for doctor visits. Costs involved with a PPO typically consist of a co-payment for doctor visits. If you choose to see an out-of-network provider, then you will have to pay the provider directly and your insurance company will reimburse you a portion of your payment. In addition, when you see an out-of-network provider, you pay an annual deductible and coinsurance.

Access

An HMO offers less flexibility in that you must choose providers who are in-network; out-of-network medical care is not covered. In addition, if you want to see a specialist, such as an otolaryngologist, you must get a referral from your PCP first. A PPO, on the other hand, is more flexible in that members can see any doctor he chooses, in or out-of-network, without a referral.

References

• QuickGuides: HMO, PPO, and Managed Care Health Plans
• Insurance.com: What is the difference between an HMO and a PPO? Which one is better?
• Investopedia: Preferred Provider Organizaton-PPO