HMO vs PPO Health Insurance: What’s the Difference?
Finding the right health insurance plan that meets your needs is incredibly important. There are several factors to consider, including cost, network coverage, ability to see specialists, and more. When comparing your options, the most common types of health plans you’ll see are health maintenance organization (HMO) plans and preferred provider organization (PPO) plans.
HMOs and PPOs vary in several ways, and to choose the option that’s right for you and your family, it’s important to understand these key differences. To help you make a more informed decision, here’s a closer look at HMO vs PPO health insurance plans, including plan costs, coverage options, and more.
Plan Comparison Overview
The following chart provides a basic overview of the primary differences between HMO and PPO plans:
|PPO Plans||HMO Plans|
|Cost||Higher monthly premiums and out-of-pocket costs||Lower monthly premiums and out-of-pocket costs. Often does not include deductibles|
|Referrals||Doesn’t require a referral to see a specialist||Does require a referral to see a specialist|
|Primary Care Doctors||You typically will not be required to have a primary care provider||You’ll likely be required to have a primary care provider to manage your healthcare|
|Network Coverage||You’ll have access to in-network and out-of-network providers||You’ll only have access to in-network providers in most cases|
|Claims||In some cases, you’ll have to pay for services directly then file a claim for reimbursement||Providers will typically bill your insurance provider|
What is a PPO Plan?
PPO plans are designed to give policyholders more flexibility when choosing healthcare providers, including hospitals, primary care doctors, and specialists. PPO plans do have provider networks, but unlike HMO plans, they still help cover medical costs if you choose to visit an out-of-network doctor. However, they may not offer as much coverage for out-of-network services.
With a PPO plan:
- You can get out-of-network coverage
- You can visit a specialist without having to get a referral from a primary care physician
- Premiums are typically more expensive than HMO plans
- You will likely have higher out-of-pocket costs
- You may have to pay a deductible before receiving coverage benefits
Ultimately, PPO plans tend to offer more flexibility and a wider range of healthcare options at the expense of higher monthly and out-of-pocket costs.
What is an HMO Plan?
HMO plans offer benefits as long as you receive services from doctors and hospitals within your insurance provider’s network. Policyholders typically have to choose a primary care doctor who will manage your healthcare services and refer you to specialists that are in-network as necessary. Out-of-network care may be available in rare instances in the event that care can’t be provided within the provider network.
With HMO plans:
- You typically have to have a primary care physician to manage your treatment
- You have to get a referral to see a specialist
- Out-of-network services are not covered
- Premiums are typically lower than PPO plans
- There usually is not a deductible before coverage benefits begin
In exchange for lower monthly and out-of-pocket costs, HMO policyholders are limited to receiving care from doctors and hospitals that are in-network.
HMO vs PPO Health Insurance: Pros & Cons
If you’re having trouble deciding which of these options is right for you, here’s a quick look at the pros and cons of HMO and PPO plans:
HMO plans may be a great option for you if you don’t have a preferred healthcare provider and are looking for an affordable healthcare plan.
Some advantages of HMO plans include:
- Lower premiums.
- Lower out-of-pocket expenses.
- You typically won’t have to file claims as providers are paid directly by the insurance company.
- Primary care physicians coordinate care on your behalf.
Some disadvantages of HMO plans include:
- Aside from medical emergencies, policyholders are required to stay in-network for care.
- You may not be able to see your preferred healthcare providers.
PPO plans may be the better choice if you value flexibility and freedom of choice. While costs may be higher, you’ll be able to receive care from nearly any provider, even if they are out-of-network.
Some advantages of PPO plans include:
- Policyholders may see in-network or out-of-network providers.
- You don’t need a referral to see a specialist.
Some disadvantages of PPO plans include:
- Higher out-of-pocket costs.
- You may have a deductible.
Request a Quote
When it comes to HMO vs PPO plans, the right choice depends on your financial circumstances and priorities. If you need an affordable plan and don’t mind only having access to in-network providers, an HMO plan might be your best option. Meanwhile, PPO plans are best suited for those that prioritize flexibility when it comes to receiving healthcare services.
If you need help finding the best health insurance policy for you, contact KSA Insurance today to learn more about your options and get a custom quote.