The differences between PPOs and HMOs. Which one is right for you?

Learn about the differences between PPO and HMO plans to make an informed decision about which one is right for your healthcare needs.

Jeremy Wolf

Written by

Jeremy Wolf

Adam Stevenson

Reviewed by

Adam Stevenson

Written on
ppos-vs-hmos
LinkedInTwitterFacebookMail
On this page0

When it comes to health insurance plans, most people are familiar with the terms PPO (Preferred Provider Organization) and HMO (Health Maintenance Organization) and while both provide coverage for medical expenses, they cater to different individuals' needs. In this blog post, we will explore the differences between PPO and HMO plans to help you make an informed decision about which one is right for your healthcare needs.

ppo-vs-hmo-table

HMO Health Insurance Plans

HMO plans emphasize maintaining overall health and preventive care. They have lower premiums and out-of-pocket expenses, making them an attractive option for those who don't anticipate needing specialized medical care frequently. However, they have some limitations:

  1. Network Restrictions: HMOs only cover medical services provided by doctors and healthcare facilities within their network. Seeking care outside of this network will result in the patient being responsible for the entire bill, except for emergencies.

  2. PCP Referral System: Before seeing a specialist, HMO enrollees must obtain a referral from their Primary Care Physician (PCP). This process ensures specialist visits are medically necessary.

  3. Geographical Limitations: HMO plans often operate within specific geographic areas, requiring enrollees to live or work within those regions to be eligible for coverage.

  4. Low or No Annual Deductible: HMOs have a low or no annual deductible, allowing patients to access healthcare services without significant upfront costs.

PPO Health Insurance Plans

PPO plans offer greater flexibility and choice when it comes to healthcare providers. They may have higher premiums, but they provide the following advantages:

  1. Wider Provider Network: PPO plans offer access to a broader network of healthcare providers, allowing patients to choose from a larger pool of doctors and specialists.

  2. No PCP Referral Required: Unlike HMOs, PPO enrollees do not need a referral from their PCP to visit a specialist. They have the freedom to see the specialists they need directly.

  3. Out-of-Network Benefits: PPO plans typically cover out-of-network providers, albeit at a lower rate. This feature can be beneficial for those who have established relationships with specific doctors.

  4. Higher Deductibles: PPOs generally have higher deductibles compared to HMOs. This is because enrollees are paying for the increased flexibility and access to a larger provider network.

Additional Considerations When Making Your Choice

  1. Copay: HMO plans usually require copayments for non-preventive medical visits, while PPO plans may or may not have copay options depending on the specific plan.

  2. HDHPs: Both HMOs and PPOs can be offered as High Deductible Health Plans (HDHPs). HDHPs, often combined with a Health Savings Account (HSA), are an option for those seeking lower premiums and are in good health.

Conclusion

Selecting the right health insurance plan is crucial in ensuring that your medical needs are adequately covered while keeping costs manageable. HMO plans are suitable for individuals focused on preventive care, lower premiums, and a smaller network of providers. On the other hand, PPO plans offer more flexibility, a broader provider network, and the freedom to see specialists without referrals. Understanding the differences between PPOs and HMOs will help you make an informed decision that aligns with your health requirements and financial situation. Always evaluate your healthcare needs and consult with a professional to find the best fit for you.

Offer Thatch to your team

Get in touch

jeremy
Written byJeremy WolfCustomer Success and Broker Operations Lead at Thatch

Jeremy Wolf, former professional athlete, is dedicated to enhancing healthcare access. As Customer Success and Broker Operations Lead at Thatch, Jeremy focus on providing customers with everything they need to navigate the complex health insurance space.

Learn more about Thatch's team
Thatch dashboard
Offer the healthcare experience your employees deserve

Explore what Thatch can offer you

Thatch Health, Inc. is a financial technology company and is not a bank. Banking services provided by Thread Bank; Member FDIC. Thatch Visa Debit Cards are issued by Thread Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit cards are accepted.
This website is operated by Thatch Health, Inc. Insurance services are provided by Thatch Health Insurance Services LLC. See Thatch Health Insurance Services LLC insurance licenses.
Insurance services described on this website are provided by Thatch Health Insurance Services LLC and not the Health Insurance Marketplace® website. In offering this website, Thatch Health Insurance Services LLC is required to comply with all applicable federal laws, including the standards established under 45 CFR §§155.220(c) and (d) as well as 45 CFR §155.260 to protect the privacy and security of personally identifiable information. This website may not support enrollment in all Qualified Health Plans (QHPs) being offered in your state through the Health Insurance Marketplace® website. For enrollment support in all available QHP options in your state, go to the Health Insurance Marketplace® website at Healthcare.gov.