HMO And PPO Health Insurance: Which One Is Better?


When it comes to health insurance there are two main types of coverage you will most frequently come across; HMOs and PPOs. The terms simply represent the type of network your coverage provides benefits in.

What’s a Health Care Network?

A network is a collection of doctors, offices, hospitals, and other health care services that you have access to based on the benefits provided by your health insurance policy. You can still use health care services outside of your policies network.

However, you will be paying out of pocket, which can be extremely costly and, at times – counter the exact purpose of having health insurance. This is why it is always important to be sure a facility or doctor you’d wish to use is within the network before purchasing any health insurance plan.

What is HMO?

These are local health care networks. They are generally offered by local insurances, short term plans, or the public marketplace. When on an HMO plan, you also must see a primary care physician to refer to a specialist (for example an OBGYN.) This means you must pay or use the benefits of a plan twice to seek treatment for something that must be addressed by a specialist. In terms of a limited network, HMOs are only ideal for those who rarely ever travel outside of their resident state.

What is PPO?

A PPO plan cover you nationwide – so you can freely travel outside of your resident state/ zip code area and be comfortable knowing you are covered in case of a medical emergency.

On top of having access to various healthcare services in various locations, you also receive additional discounts under some private health insurance plans for being within the network. So, not only do your policy’s benefits come into effect, but sometimes you can even gain an additional discount.

What Is The Difference Between A PPO And HMO?

A PPO plan can be secured through both the public and private markets. It offers much more flexibility than an HMO as it has access to a broader network.

Another advantage of a PPO is that you are not required to visit a primary care physician before seeing a specialist. You can do straight to the doctor that you need to receive the treatment you need and save money by reducing your number of doctor visits per year.

Why Is HMO Cheaper Than PPO?

An HMO is usually cheaper than a PPO because it is a smaller network, often limited to your zip code area, and always limited to your state of residence.

Can’t Choose Between HMO And PPO?

Well, it really depends on your situation. An HMO can still be ideal for cutting costs for temporary situations, or again, to cut costs for those who don’t travel like infants or the elderly.

If you’re unsure of what network for coverage may be beneficial for you- simply consult a health care professional to help you in weighing out your options and #ask the Art of Insurance.