How to Compare HMO to PPO

Health maintenance organizations (HMOs) and preferred provider organizations (PPOs) are popular options for managed care in many workplace benefit plans. Choosing the appropriate one for you depends on your goals and budget.

Referrals

• HMOs generally require all doctor visits to be funneled through a primary care provider, who then refers you to other doctors. A PPO doctor may provide a referral, but in most PPO plans, this step is not necessary.

Fees

• Because an HMO is controlled by the insurance company and the primary caregiver, HMO costs are generally lower than PPO rates. Most HMOs do not require you meet a deductible before services are covered.

Choice

• PPOs allow you to see any doctor you choose but will charge more for a provider who is not "preferred." You generally are allowed a wide variety of covered procedures. An HMO may deny coverage for physicians outside the network and constricts coverage based on medical approval.

Specialists

• A PPO allows specialist visits without a referral but may require approval of the insurance carrier before a hospital stay. HMOs may not pay for visits to a specialist or a hospital without first receiving a referral from your primary care doctor.