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The Standoff: PPO vs. HMO

Deciding to purchase health insurance is an important and wise first step. One of the next decisions you must make is whether to go the route of and HMO or a PPO. Hopefully, we can help cut down your research time.

Here’s what you need to know about these two plans before making your final decision.


PPO stands for Preferred Provider Organization. With this plan, you can choose to receive care from any health care provider of your choosing. PPO’s contract with networks of health care professionals in order to provide lower rates on medical services if you do choose to stay in-network, but it is not necessary.

Staying in network will probably cost you less (you are only responsible for your annual deductible and a copayment), as opposed to out-of-network, in which you could end up paying a higher amount.

With a PPO you are not required to select a PCP (Primary Care Physician) and you may see specialists without first getting a referral.

Choose a PPO health plan if you don’t mind paying a little more for the increased freedom and flexibility of seeing any health provider, without a referral.


A HMO stands for Health Maintenance Organization. On the contrary to a PPO, HMOs require that you receive most of your medical care from a network provider. Upon enrolling in a HMO, you must select a PCP or ‘gatekeeper’ who will be responsible for coordinating your basic health care needs whatever they may be (internal medicine, gynecology, pediatrician, etc).

If you require care from a specialist, HMOs require that you first get a referral from your PCP. That means any blood work, lab testing or x-rays must be run past your PCP to be covered. If you choose to go outside of your network of doctors, hospitals and other providers or fail to get a referral, there’s a good chance you will end up paying in full for your health care.

The only costs you are responsible for in a HMO (assuming you stay in-network), will be the copayments. Out-of-pocket costs, deductibles and copayments are generally smaller, as well as any payments for prescription drugs.

Choose a HMO for more affordable coverage and lower premiums, as long as you are able to abide by in-network restrictions.


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