HMO vs. PPO plans: What’s the difference?

Which one is cheaper? Which one provides the coverage you need? To help you decide, we’ve created a simple comparison chart that lays out the basic features of HMOs and PPOs. Once you have a better understanding of each plan type and how they work, it will be much easier to choose the plan that’s best for you and your family.

Question HMO health maintenance organization PPO preferred provider organization How much will this plan cost? Lower cost
HMO plans typically have lower monthly premiums. You can also expect to pay less out of pocket.
Higher cost
PPOs tend to have higher monthly premiums in exchange for the flexibility to use providers both in and out of network without a referral. Out-of-pocket medical costs can also run higher with a PPO plan.
Do I have to use a primary care physician (PCP)? Yes
With most HMO plans, all of your healthcare services are coordinated by your designated PCP.
PPO plans do not require referrals for any services.
Do I have to get referrals to use another doctor? Yes
With an HMO, you must first schedule an appointment with your PCP and they will provide a referral to an in-network specialist.
PPO plans do not require referrals for any services.
If I have a doctor or a specialist who is out of network, will I still be able to see him or her and have the costs covered? No
HMOs don’t offer coverage for care from out-of-network healthcare providers. The only exception is for true medical emergencies.
With a PPO, you have the flexibility to visit providers outside of your network. However, visiting an out-of-network provider will include a higher fee and a separate deductible.
Will I need to file claims? No
Since HMOs only allow you to visit in-network providers, it’s likely you’ll never have to file a claim. This is because your insurance company pays the provider directly.
In some cases, you will have to pay a doctor for services directly and then file a claim to get reimbursed. This is most common when you seek services from out-of-network providers.