Health Maintenance Organizations (HMO) – HMO plans offer healthcare coverage through a network of health providers that provide services to members. HMOs require group members to choose primary care physician (PCP) that addresses the majority of their health needs. If a specialist is needed, the patient must first go through their primary physician to get a referral before insurance will cover any services. HMOs typically offer more preventative care services and lower priced premiums than other types of plans. With an HMO, going outside of the network means paying the full cost of any visits or procedures, as does seeing a specialist without a referral.
Preferred Provider Organizations (PPO) – A PPO health insurance plan is similar to an HMO in that it is also a network-based plan. With a PPO, however, you can see any physician in the network without getting a referral from a primary care physician first. A PPO allows patients to visit out-of-network doctors with their coverage, although the level of coverage is usually greater for staying within the network. (It’s important to note that going out of the network doesn’t guarantee any coverage, so it’s important to check that they are contracted with the insurance provider.) Most PPO plans have a deductible that must be met before the full coverage benefits can be applied.
Want to learn more about the differences between an HMO and PPO? This article explains the specifics, as well as some of the finer points of having insurance through a managed care network.