What is the difference between an HMO and a PPO?

There are four different networks for health insurance including, HMOs, EPOs, POS. and PPOs. It is important that individuals understand the difference in the networks when choosing their health coverage. 

HMOs are also known as Health Maintenance Organizations. They are smaller, restricted networks that typically only give individuals coverage in the county or zip code they live in, except in the case of emergency. Individuals will also need a referral to be seen by a specialist when on an HMO plan. 

Policyholders must choose a primary care physician (PCP) from within the HMO network. The PCP serves as the main point of contact for all of the policyholder’s healthcare needs and coordinates referrals to specialists within the network when necessary. EPOs are also known as Exclusive Provider Organizations. They are similar to HMOs where individuals are restricted to primarily their zip code or county, however, individuals do not need a referral to be seen by a specialist.

  A POS, or Point of Service, health insurance plan is basically a hybrid of an HMO and PPO. Policyholders are required to choose a PCP who provides their healthcare and referrals to see specialists within the plan’s network. Members are able to be seen by doctors outside of the network, however, there will be higher out-of-pocket costs associated with that. 

A PPO, also known as a Preferred Provider Organization is the largest network. With a PPO, members are covered nationwide. The plan will travel with them and they do not need a referral to be seen by a specialist. PPOs offer the most flexibility compared to any other network. These plans are typically more expensive than HMO plans.

If an individual is looking to save money on their monthly premiums and they are relatively healthy an HMO is most likely the most suitable option. On the other hand, individuals who are unhealthy and require regular doctors visits, should consider a PPO plan.