PPO vs HMO health plans - what is the difference?

So, what is the difference between the PPO and HMO health plans?

Both PPO and HMO insurance plans offer similar coverage, but there are some important differences. Learn the differences so you can select the best option for you and your family.

	HMO Health Maintenance Organization	PPO Preferred Provider Organization
Do I need to designate a Primary Care Physician (PCP)?	YES With most HMO plans, all of your healthcare services will be coordinated between you and your designated Primary Care Physician (PCP).	NO A PPO plan does not require you to select a PCP. You can receive care from any doctor you choose, however you will save more money by choosing a doctor, specialist or hospital that is within your network.
Is a referral needed?	YES As an example, with an HMO, if you have severe allergies and need to see an allergist, you will first schedule a visit with your PCP. Your doctor will then provide you with a referral for an in-network specialist.	NO PPO plans do not require you to get a referral in order to see a specialist.
If I have a doctor or specialist who is out-of-network, will I still be able to see them and have my care covered?	NO HMOs don’t offer coverage for care from an out-of-network physician, hospital or facility except in the case of a true medical emergency.	YES With a PPO, you have the flexibility to visit providers, hospitals and facilities outside of your network. Keep in mind that visiting an out-of-network provider includes a higher fee and a separate deductible.
Will I have to file a claim?	NO Since HMOs only allow you to see in-network providers, it’s likely you’ll never have to file a claim. This is because your insurance company pays the provider directly.	YES In some cases with a PPO, you will have to pay a doctor for services directly and then file a claim to get reimbursed. This is most common when you seek a service from an out-of-network provider.
How much will it cost?	Lower Cost HMO plans typically have lower monthly premiums and you can expect to pay less for out-of-pocket medical services. Both plans work on a combination of deductibles, cost-share or co-insurance and co-pays to pay for services.	Higher Cost PPOs tend to have higher monthly premiums in exchange for the flexibility to choose providers both in- and out-of-network and without a referral. Out-of-pocket medical costs can also run higher with a PPO plan.