An HMO, or health maintenance organization, is an insurance plan offering coverage through a physician network. When an individual has an HMO, they typically pay a monthly or yearly fee to receive access to health insurance coverage. In selecting care, the individual must choose a healthcare provider under the HMO’s contract.
What’s the difference between HMOs and PPOs?
A similar plan to an HMO is a preferred provider plan (PPO). PPOs tend to have higher premiums, deductibles and copays compared to HMOs.
HMOs require individuals to have a primary care physician (PCP) and referrals to specialists, but PPOs do not.
In addition, PPO plans generally cover out-of-network providers, often at higher rates than in-network, whereas HMOs usually do not.