What’s the difference between an HMO and PPO?


A Health Maintenance Organization (HMO) is the most restrictive kind of health insurance, whereas a Preferred Provider Organization (PPO) is more broad, offering a set of doctors and hospitals to choose from to receive care.

In an HMO plan, one physician or nurse practitioner is designated to serve as your primary care doctor, and that person provides most of your medical care, including referring you to specialists and other health care professionals as needed. Insurance coverage is not available if you elect to see a specialist without a referral from your primary care doctor. Meanwhile, a PPO plan offers a limited set of in-network providers, and when you use them, a greater share of your medical bills will be covered. If you use an out-of-network provider, you will still receive some insurance coverage, but you may have exposure to much higher costs.