HMO vs PPO: Things To Consider

To choose the right plan for you, consider the price and flexibility you need in a health plan. These are the differences between an HMO and a PPO.

What Are the Differences Between HMO and PPO Plans?

Choosing between an HMO or a PPO health plan doesn't have to be complicated. The main differences between the two are the size of the healthcare provider network, the flexibility of coverage or payment assistance for doctors in network vs out of network, and the monthly payment.

The monthly payment for an HMO plan is lower than for a PPO plan with a comparable deductible and out-of-pocket maximum.

CareFirst's PPO plans offer a wide network of providers. In exchange for a lower monthly payment, an HMO offers a narrower network of available doctors, hospitals and specialists. CareFirst has built its plans with patients' freedom to see the doctor of their choice in mind, and the HMO plan still covers a wider network of doctors than many other health insurance providers.

In-depth: HMOs

HMO stands for Health Maintenance Organization. A Health Maintenance Organization is a network of doctors, hospitals and other healthcare providers who agree to provide care at a reduced rate. To keep costs low, HMOs may require you to select a primary care physician (sometimes called a primary care provider or PCP), who can refer you to specialists when needed.

An HMO plan will only pay for care from healthcare providers in the HMO network, except for emergency care, which may be covered out of network. Lab work, such as a blood draw or a urine test, is also limited to one laboratory provider covered by the HMO network.

HMO plans are generally less expensive than PPO plans, with lower monthly payments, making them ideal if your favorite doctors are already in the network, or if you receive most of your care close to home.

In-depth: PPOs

PPO stands for Preferred Provider Organization. Like an HMO, a Preferred Provider Organization is a network of doctors, hospitals and healthcare providers who agree to provide care at a certain rate. Unlike an HMO, you are not limited to providers who are in network, though your copay or out-of-pocket cost for out-of-network visits may be higher than for in-network providers.

PPO plans typically require higher monthly payments in exchange for increased flexibility. With a PPO, you do not need to maintain a primary care physician and can see a different doctor of your choice at any time, including specialists. This also means when you are traveling, you can receive care wherever you are.

Additionally, PPO plans offer more options for laboratory service providers. When you need lab work done, you can choose the most convenient location under a PPO network.

Things To Consider When Choosing Between HMO and PPO:

To choose the right plan for you and your family, you may want to consider the following:

Do you need a lower monthly payment?

Compare the monthly cost of the HMO and PPO plans. If you need a lower monthly fee, consider an HMO plan.

Do you stay close to home, or do you travel a lot?

If you travel frequently and are more likely to need care while away from home, especially if you are living with a chronic condition or enjoy high-risk hobbies such as certain sports, you may need a PPO to provide the best coverage for your needs.

If you need a lot of specialist care, say you are managing a rare or chronic condition, you may also prefer the ease of choosing specialists and seeing them right away that you get with a HMO plan.

If you mostly get care in your home city or mostly from your family physician, an HMO is more likely to provide the right coverage for you.

If you already have a doctor you like, does the plan you are considering cover visits with him or her?

While CareFirst's HMO plans have especially wide networks compared to many other HMOs, the PPO plans still offer in network coverage for more healthcare providers. If you would like to keep your doctor, you can determine whether he or she is in network under an HMO plan, a PPO plan or both.

Choosing the right health plan can give you peace of mind, knowing that your insurance plan has your health needs covered.