What is the difference between an HMO and PPO Health Insurance?

• HMO’s (Health Maintenance Organizations)
• Positive - HMO’s may have better benefits, such as:
• MATERNITY COVERAGE on Individual / Family Plans (On Employer Group Plans, Maternity coverage is almost always included)
• Copays for most services, including hospitalization
• No deductibles (on some plans)
• 100% Co-Insurance (on some plans)
• Expanded “Well-Care” coverage
• Negative - HMO’s restrict your access to the Provider of your choice
• You must select a Primary Care Physician, who refers you to any Specialists that you may need
• They have a smaller list of Providers in the Network
• You are not covered Out-of-Network, unless it’s an emergency
• PPO’s (Preferred Provider Organizations)
• Positive - PPO's usually have lower premiums, particularly for women & children
• Positive - PPO’s have greater access to the Provider of your choice
• You do NOT need to select a Primary Care Physician
• You may self-refer to Specialists
• You have a larger list of Providers in the Network
• Often, there is a National network, in case you are traveling
• You are covered Out-of-Network, however, your Deductibles and Co-Insurance Percentages will be greater for Out-of-Network charges.
• Negative - PPO's have lesser benefits, such as
• On Individual/Family PPO's there are no Maternity benefits except complications of pregnancy.  (On Employer Group Plans, Maternity coverage is almost always included.)
• Deductibles
• Co-Insurance Percentages of 90% or 80% (after the deductible is met)
• Some plans limit the “Well-Care” coverage

Other plan designs that are a "marriage" between an HMO & a PPO are:

• Open Access HMO's (OA HMO's)

• Point of Service Plans (POS)

List of all Frequently Asked Questions and Glossary

Last updated 2/2/2007