Health Insurance

What is the difference between an HMO and a PPO?

The main difference between HMO plans and PPO plans comes down to flexibility and price.


HMO stands for Health Maintenance Organization. With an HMO, you must choose a primary care provider (PCP) from a network of doctors. Your PCP will refer you to other doctors and clinicians within that network for any specialized care you may need. HMOs generally have lower premiums and lower overall out-of-pocket costs than equivalent PPOs.


PPO stands for Preferred Provider Organization. With a PPO, you can go to any doctor or facility you’d like without a referral, though you’ll pay less for services from doctors and facilities who are in-network. PPOs generally have higher premiums and higher overall out-of-pocket costs than equivalent HMOs.

Learn how to choose the right health benefits plan here.

This article provides general information and shouldn’t be construed as legal, benefits, or HR advice. Benefits and insurance regulations may change over time and may vary by location and employer size. So, please consult a licensed broker or appropriately certified expert for advice specific to your business’s benefits options.