The Difference Between HMOs and PPOs

Choosing the right health care plan for you and your family is a tough task. There are many options available and many decisions to make. Understanding the difference between an HMO and a PPO is a good place to start.

HMOs, or Health Maintenance Organizations, and PPOs, or Preferred Provider Organizations, are two common types of health plans. Both are types of managed care, which help insurance companies control costs, and each comes with its own set of pros and cons.

What Is an HMO?

In an HMO, patients are restricted to a specific group of doctors and hospitals, which is referred to as a “network.” The network is made up of medical providers who agree to lower their rates for health plan members and meet certain quality standards.

If you have an HMO, your care is only covered if you see a provider within your network. The plans also come with certain restrictions, such as only allowing a certain number of visits, tests, or treatments.

Here are a few other things to know about HMOs:

  • Some plans require you to choose a primary care physician (PCP), who determines what treatment you need.
  • Some plans require a PCP referral for visits to a specialist in order for it to be covered.
  • Any visits to a doctor outside your network will not be covered, meaning you’ll have to pay the entire cost of your medical care.
  • HMOs usually have lower premiums, and there is usually no deductible or a very low one.

What Is a PPO?

In general, PPOs offer more flexibility. In a PPO, patients can choose any physician that they want, either inside or outside their network. PPO insurance will cover an outside-network doctor’s visit or treatment, but it may be at a lower rate.

Here are a few things to know about PPOs:

  • You don’t need to see your PCP first before visiting a specialist or other doctor.
  • You can go to a hospital, or see a doctor outside the network, and be covered. But, your benefits are better if you stay in your PPO network.
  • PPO premiums tend to be higher, and there’s often a deductible.

Which Is Best for You?

Deciding between an HMO and PPO depends on your individual situation. HMOs are often more affordable, but come with less coverage and more restrictions. PPOs offer more flexibility and greater coverage, but they cost more and usually have a deductible.

No matter what you choose, be sure to review a summary of benefits for each plan before making a decision. That way you understand what’s covered and how the plan works.

More questions? Contact Fidelis today!

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This is not a complete listing of plans available in your service area. For a complete listing, please contact 1-800-MEDICARE (TTY users should call 1-877-486-2048), 24 hours a day/7 days a week or consult www.medicare.gov