When you’re selecting a new health insurance plan, you probably have to choose between a few different plans, HMOs and PPOs included. The main differences come down to flexibility and price.

HMO (Health Maintenance Organization)

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 (Preferred Provider Organization)

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.

Lots of factors affect which health benefit plans are right for your company and your employees—learn how to choose the right health benefits plan.

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