PPO, HMO, POS, EPO… SOS! Understanding health insurance terminology, abbreviations, and deadlines can be overwhelming when trying to choose a health insurance plan. Understanding the details, however, can save you time, money, and stress.
Below, we discuss the differences between the two most popular types of health plans: Preferred Provider Organization (PPO) and Health Maintenance Organization (HMO) to help you make an informed decision about which type of health insurance plan is best for you and your family.
Preferred Provider Organization (PPO)
These plans include coverage for both in-network and out-of-network doctors. With a PPO plan, you don’t need to choose a primary care doctor, nor are you required to get a referral in order to see a specialist. While you have the freedom to go to any doctor or clinic, you will likely have to pay more during an out-of-network visit. For this reason, look for doctors and services in your network whenever possible.
PPO plans are generally more expensive because of their flexibility. You will likely pay copayments or an annual deductible with a PPO plan.
Health Maintenance Organization (HMO)
These plan require that you choose a primary care doctor who you will have to contact first should you need a referral. This means that if you need to see a specialist, get lab work, or need preventive screenings like colonoscopies and mammograms, you’ll need to go through your primary care doctor first. Emergencies do not require a referral, but typically out-of-network coverage is not covered by HMO plans.
HMO plans typically have less out-of-pocket costs and lower deductibles, as well as lower costs for prescription drugs and office visit co-pays. However, keep in mind that if you see a doctor or go to a clinic that is not in your network, you will have to pay for every expense out-of-pocket.